As
filed with the U.S. Securities and Exchange Commission
on September 24, 2024.
Registration
Statement No. 333-280554
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment
No. 1 to
Form
F-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
GLOBAVEND
HOLDINGS LIMITED
(Exact
name of registrant as specified in its charter)
Cayman
Islands |
|
4731 |
|
Not
Applicable |
(State
or other jurisdiction of
incorporation
or organization) |
|
(Primary
Standard Industrial
Classification
Code Number) |
|
(IRS
Employer
Identification
Number) |
Office
1401, Level 14, 197 St Georges Tce,
Perth,
WA 6000,
Australia
+61
08 6141 3263
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
c/o
Cogency Global Inc.
122
East 42nd Street,
18th Floor
New
York, NY 10168
+212
947-7200
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Copies
to:
Virginia
Tam, Esq.
K&L
Gates
44/F,
Edinburgh Tower, The Landmark
15
Queen’s Road Central, Hong Kong
+852
2230 3535 |
|
Rodrigo
Sanchez, Esq.
Lucosky
Brookman LLP
111
Broadway, Suite 807
New
York, NY 10022
+1-732-395-4417 |
Approximate
date of commencement of proposed sale to public: As soon as practicable after this registration statement becomes effective.
If
any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act, check the following box. ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act: Emerging growth company
☒
If
an emerging growth company that prepares its financial statements in accordance with accounting principles generally accepted in the
United States (“U.S. GAAP”), indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the
Securities Act. ☐
† |
The
term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards
Board to its Accounting Standards Codification after April 5, 2012. |
The
registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the
Commission, acting pursuant to such Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement
filed with the U.S. Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it
is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY
PROSPECTUS |
SUBJECT
TO COMPLETION, DATED , 2024 |
Up
to a maximum of $20 million in Ordinary Shares
306,123
Ordinary Shares
as Initial Commitment Shares
and
Up to 306,123 Ordinary Shares as True-Up Shares
GLOBAVEND
HOLDINGS LIMITED
This
prospectus relates to resale from time to time by Square Gate Capital Master Fund, LLC – Series 1, a Delaware limited liability
company (“Investor”) of our ordinary shares, par value US$0.001 per share (the “Ordinary Shares”), in an offering
amount of up to $20,000,000.00 (the “ELOC Shares”), which would represent approximately 23,389,077 Ordinary Shares
based on the closing price of our shares on the Nasdaq Capital Market, LLC, or “Nasdaq”, on June 27, 2024 of $0.8551
per share, that have been or may be issued by us to the Investor pursuant to an equity purchase agreement, dated as of March 15,
2024, by and between us and the Investor (the “ELOC Purchase Agreement”) establishing a committed equity facility (the “Facility”
or “Equity Line of Credit”), together with (i) 306,123 Ordinary Shares that have been issued by us to the Investor
pursuant to the ELOC Purchase Agreement, being the commitment shares for the Facility (the “Initial Commitment Shares”)
and (ii) up to an additional 306,123 Ordinary Shares (the “True-Up Shares,” and together with the Initial Commitment Shares,
the “Commitment Shares”), to be issued only if the product of (x) the closing price of the Ordinary Shares on the trading
day following the Lock-Up Termination Date (as defined in the ELOC Purchase Agreement) and (y) the number of Initial Commitment Shares
is less than $300,000, and then only to the extent to cause the value of the Commitment Shares to be $300,000 on such date. We are
not selling any securities under this prospectus and will not receive any of the proceeds from the sale of the ELOC Shares by the Investor.
However, we may receive up to $20 million in aggregate gross proceeds from the Investor under the ELOC Purchase Agreement in connection
with sales of the ELOC Shares to the Investor pursuant to the ELOC Purchase Agreement after the date of this prospectus. See “The
Equity Line of Credit” for a description of the ELOC Purchase Agreement and the Facility and “Selling Shareholder”
for additional information regarding the Investor.
The
Investor may offer, sell or distribute all or a portion of the ELOC Shares hereby registered publicly or through private transactions
at prevailing market prices or at negotiated prices. We will bear all costs, expenses and fees in connection with the registration of
these ELOC Shares, including with regard to compliance with state securities or “blue sky” laws. The timing and amount of
any sale are within the sole discretion of the Investor. The Investor is an underwriter under the Securities Act of 1933, as amended
(the “Securities Act”) and will pay or assume any discounts, commissions or concessions received by them except as set
forth in the ELOC Purchase Agreement. Although the Investor is obligated
to purchase our ELOC Shares under the terms of the ELOC Purchase Agreement to the extent we choose to sell such ELOC Shares to
it (subject to certain conditions), there can be no assurances that the Investor will sell any or all of the ELOC Shares purchased under
the ELOC Purchase Agreement pursuant to this prospectus. See “Plan of Distribution.”
Given
the relative lack of liquidity in our stock, sales of our Ordinary Shares under the registration statement of which this prospectus is
a part could result in a significant decline in the market price of our securities.
The
Ordinary Shares are listed on the Nasdaq under the symbol “GVH.” On June 27, 2024, the last reported sale price of
our Ordinary Shares on Nasdaq was $0.8551 per share.
Investors
are cautioned that you are buying shares of a Cayman Islands holding company with operations in Hong Kong by its operating subsidiary.
Globavend
Holdings is a holding company incorporated in the Cayman Islands with no material operations of its own, and we conduct our operations
primarily in Hong Kong through Globavend HK. References to the “Company,” “we,” “us,” and “our”
in the prospectus are to Globavend Holdings, the Cayman Islands entity that will issue the Ordinary Shares being offered. References
to “Globavend HK” are to our sole operating subsidiary as of the date of this prospectus. This is an offering of the Ordinary
Shares of Globavend Holdings, the holding company in the Cayman Islands, instead of the shares of the Globavend HK. Investors in this
offering may never directly hold any equity interests in Globavend HK.
Investing
in our Ordinary Shares is highly speculative and involves a high degree of risk. Before buying any shares, you should carefully read
the discussion of material risks of investing in our Ordinary Shares in “Risk Factors” beginning on page 16 of this prospectus.
Our
operations are principally located in Hong Kong, a special administrative region of the People’s Republic of China (“China”
or the “PRC”), with its own governmental and legal system that is independent from mainland China, including having its own
distinct laws and regulations. As of the date of this prospectus, we are not subject to the PRC government’s direct influence or
discretion over the manner in which we conduct our business activities outside of the PRC. However, due to long-arm provisions under
the current PRC laws and regulations, there remains regulatory uncertainty with respect to the implementation and interpretation of laws
in China. Additionally, all of the legal and operational risks associated with operating in the PRC also apply to our operations in Hong
Kong, and we face the risks and uncertainties associated with interpretation and the application of the complex and evolving PRC laws
and regulations and as to whether and how the recent PRC government statements and regulatory developments, such as those relating to
data and cyberspace security, and anti-monopoly concerns would be applicable to Globavend Holdings or Globavend HK, given the substantial
operations of our sole operating subsidiary in Hong Kong and the possibilities that the Chinese government may exercise significant
oversight over the conduct of business in Hong Kong. We are also subject to the risks of uncertainty about any future actions of the
PRC government or authorities in Hong Kong in this regard.
Should
the PRC government choose to exercise significant oversight and discretion over the conduct of our business, they may intervene in or
influence our operations. Such governmental actions:
|
● |
could
result in a material change in our operations and/or the value of our securities; |
|
|
|
|
● |
could
significantly limit or completely hinder our ability to continue our operations; |
|
|
|
|
● |
could
significantly limit or completely hinder our ability to offer or continue to offer our securities to investors; and |
|
|
|
|
● |
may
cause the value of our securities to significantly decline or be worthless. |
We
are aware that recently, the PRC government has initiated a series of regulatory actions and new policies to regulate business operations
in certain areas in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing
supervision over China-based companies listed overseas using a variable interest entity (“VIE”) structure, adopting new measures
to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Since these statements and regulatory
actions are new, it is highly uncertain how soon the legislative or administrative regulation making bodies will respond and what existing
or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any. It is also highly
uncertain what the potential impact such modified or new laws and regulations will have on Globavend HK’s daily business operation,
its ability to accept foreign investments and the listing of our Ordinary Shares on U.S. or other foreign exchanges. The PRC government
may intervene or influence our operations at any time and may exert more control over offerings conducted overseas and foreign investment
in Hong Kong-based issuers. The PRC government may also intervene or impose restrictions on our ability to move out of Hong Kong to distribute
earnings and pay dividends or to reinvest in our business outside of Hong Kong. Furthermore, PRC regulatory authorities may in the future
promulgate laws, regulations or implementing rules that require our Company or any of our subsidiaries to obtain regulatory approval
from PRC authorities before this offering. These actions could result in a material change in our operations and could significantly
limit or completely hinder our ability to complete this offering or cause the value of our Ordinary Shares to significantly decline or
become worthless. See “Prospectus Summary — Recent Regulatory Developments in the PRC” beginning on page 9.
We
are headquartered in Hong Kong and not mainland China. We do not use VIEs in our corporate structure. We, through our indirect wholly-owned
subsidiary, Globavend HK, engage in the provision of end-to-end supply chain solutions in Hong Kong, Australia and New Zealand
as an e-commerce logistics provider.
As
of the date of this prospectus, our operations in Hong Kong and our registered public offering in the United States are not subject to
the review or prior approval of the Cyberspace Administration of China (the “CAC”) or the China Securities Regulatory Commission
(the “CSRC”), because (i) the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings
like ours under this prospectus are subject to this regulation; and (ii) Globavend HK was established and operates in Hong Kong
and is not included in the categories of industries and companies whose foreign securities offerings are subject to review by the CSRC
or the CAC. Uncertainties still exist, however, due to the possibility that laws, regulations, or policies in the PRC could change rapidly
in the future. In the event that (i) the PRC government expanded the categories of industries and companies whose foreign securities
offerings are subject to review by the CSRC or the CAC and that we are required to obtain such permissions or approvals, or (ii) we inadvertently
concluded that relevant permissions or approvals were not required or that we did not receive or maintain relevant permissions or approvals
required, any action taken by the PRC government could significantly limit or completely hinder our operations in Hong Kong and our ability
to offer or continue to offer our Ordinary Shares to investors and could cause the value of such securities to significantly decline
or be worthless and even the delisting of our Ordinary Shares. The delisting of our Ordinary Shares, or the threat of their
being delisted, may materially and adversely affect the value of your investment in the future.
On
December 24, 2021, the CSRC released the Draft Administrative Provisions and the Draft Filing Measures, both of which had a comment period
that expired on January 23, 2022. The Draft Administrative Provisions and Draft Filing Measures regulate the administrative system, record-filing
management, and other related rules in respect of the direct or indirect overseas issuance of listed and traded securities by “domestic
enterprises.” The Draft Administrative Provisions specify that the CSRC has regulatory authority over the “overseas securities
offering and listing by domestic enterprises”, and requires “domestic enterprises” to complete filing procedures with
the CSRC if they wish to list overseas. On February 17, 2023, the CSRC released the Trial Measures for Administration of Overseas Securities
Offerings and Listings by Domestic Companies and five interpretive guidelines (collectively, the “CSRC Filing Rules”). According
to the CSRC Filing Rules, domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill
the filing procedures and report relevant information to the CSRC; any failure to comply with such filling procedures may result in administrative
penalties, such as an order to rectify, warnings, and fines. On April 2, 2022, the CSRC published the Draft Archives Rules, for public
comment. These rules state that in the overseas listing activities of domestic companies, domestic companies, as well as securities companies
and securities service institutions providing relevant securities services thereof, should establish a sound system of confidentiality
and archival work and shall not disclose state secrets or harm the state and public interests.
Under
the CSRC Filing Rules, Chinese domestic companies conducting overseas securities offerings and listing activities, either in direct
or indirect form, shall complete filing procedures with the CSRC pursuant to the requirements of the CSRC Filing Rules within three working
days following their submission of initial public offerings or listing application.
Management
understands that as of the date of this prospectus Globavend HK has no operations in China and is not required to complete filing procedures
with the CSRC pursuant to the requirements of the CSRC Filing Rules. While Globavend HK has no current operations in China, should we
have any future operations in China and should we (i) fail to receive or maintain such permissions or approvals, (ii) inadvertently conclude
that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and require us
to obtain such permissions or approvals in the future, we may face sanctions by the CSRC, the CAC or other PRC regulatory agencies. These
regulatory agencies may also impose fines and penalties on our operations in China, limit our ability to pay dividends outside
of China, limit our operations in China, delay or restrict the repatriation of the proceeds from this offering into China or take other
actions that could have a material adverse effect on our business as well as the trading price of our Ordinary Shares. We may be required
to restructure our operations to comply with such regulations or potentially cease operations in the PRC entirely. The CSRC, the CAC
or other PRC regulatory agencies also may take actions requiring us, or making it advisable for us, to halt this offering before settlement
and delivery of our Ordinary Shares. In addition, if the CSRC, the CAC or other regulatory PRC agencies later promulgate new rules requiring
that we obtain their approvals for this offering, we may be unable to obtain a waiver of such approval requirements, if and when procedures
are established to obtain such a waiver. Any action taken by the PRC government could significantly limit or completely hinder our operations
in the PRC and our ability to offer or continue to offer securities to investors and could cause the value of such securities to significantly
decline or be worthless.
Furthermore,
on July 10, 2021, the CAC issued a revised draft of the Measures for Cybersecurity Review for public comment, which required that, among
others, in addition to any “operator of critical information infrastructure”, any “data processor” controlling
personal information of no less than one million users which seeks to list in a foreign stock exchange should also be subject to cybersecurity
review, and further elaborated the factors to be considered when assessing the national security risks of the relevant activities. On
December 28, 2021, the CAC, the National Development and Reform Commission (“NDRC”), and several other administrations jointly
issued the revised Measures for Cybersecurity Review, which became effective and replaced the existing Measures for Cybersecurity Review
on February 15, 2022. According to the Revised Review Measures, if an “online platform operator” that is in possession of
personal data of more than one million users intends to list in a foreign country, it must apply for a cybersecurity review. Based on
a set of Q&A published on the official website of the State Cipher Code Administration in connection with the issuance of the Revised
Review Measures, an official of the said administration indicated that an online platform operator should apply for a cybersecurity review
prior to the submission of its listing application with non-PRC securities regulators. Moreover, the CAC released the draft of the Regulations
on Network Data Security Management in November 2021 for public consultation, which among other things, stipulates that a data processor
listed overseas must conduct an annual data security review by itself or by engaging a data security service provider and submit the
annual data security review report for a given year to the municipal cybersecurity department before January 31 of the following year.
Given the recency of the issuance of the Revised Review Measures and their pending effectiveness, there is a general lack of guidance
and substantial uncertainties exist with respect to their interpretation and implementation. It remains unclear whether a Hong Kong company
which collects personal information from PRC individuals shall be subject to the Revised Review Measures. We do not currently expect
the Revised Review Measures to have an impact on our business, our operations or this offering as we do not believe that Globavend HK
would be deemed to be an “operator of critical information infrastructure” or a “data processor” controlling
personal information of no less than one million users, that would be required to file for cybersecurity review before listing in the
U.S., because (i) Globavend HK is organized and operating in Hong Kong and the Revised Review Measures remains unclear whether it shall
be applied to Hong Kong companies; (ii) Globavend HK operates without any subsidiary or VIE structure in China; (iii) as of date of this
prospectus, Globavend HK has neither collected nor stored personal information of any PRC individual clients, which also make up
far less than one million users; and (iv) as of the date of this prospectus, Globavend HK has not been informed by any PRC governmental
authority of any requirement that it files for a cybersecurity review. However, there remains significant uncertainty in the interpretation
and enforcement of relevant PRC cybersecurity laws and regulations. If the Revised Review Measures are adopted into law in the future
and if Globavend HK is deemed to be an “operator of critical information infrastructure” or a “data processor”
controlling personal information of no less than one million users, the operation of our subsidiaries and the listing of our Ordinary
Shares in the U.S. could be subject to CAC’s cybersecurity review.
We
have been advised by our Hong Kong counsel, that based on their understanding of the current Hong Kong laws, as of the date of this prospectus,
the Company and Globavend HK are not required to obtain any permissions or approvals from Hong Kong authorities before listing in the
U.S. and issuing our Ordinary Shares to foreign investors. No such permissions or approvals have been applied for by the Company and/or
its subsidiaries or denied by any relevant authorities. As of the date of this prospectus, Globavend HK does not require any requisite
permissions or approvals from the Hong Kong authorities to operate its businesses. Globavend HK has received all requisite permissions
or approvals from the Hong Kong authorities to operate their businesses in Hong Kong, including but not limited to their business registration
certificates. However, we have been advised by our Hong Kong counsel that uncertainties still exist, due to the possibility that laws,
regulations, or policies in Hong Kong could change rapidly in the future.
Based
on Management’s internal assessment that the Company and its subsidiaries currently have no material operations in the PRC, Management
understands that as of the date of this prospectus, the Company is not required to obtain any permissions or approvals from PRC authorities
before listing in the U.S. and issuing our Ordinary Shares to foreign investors, including the CAC or the CSRC because (i) the
CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like ours under this prospectus are
subject to this regulation; and (ii) the Company operates in Hong Kong and is not included in the categories of industries and companies
whose foreign securities offerings are subject to review by the CSRC or the CAC. We also understand that Globavend HK is not required
to obtain any permissions or approvals from any Chinese authorities to operate their businesses as of the date of this prospectus. No
permissions or approvals have been applied for by the Company or denied by any relevant authorities.
In
addition, our Ordinary Shares may be prohibited from trading on a national exchange or over-the-counter market under the Holding Foreign
Companies Accountable Act (the “HFCA Act”) if the Public Company Accounting Oversight Board (United States) (the “PCAOB”)
is unable to inspect our auditors for two consecutive years. Pursuant to the HFCA Act, the PCAOB issued a Determination Report on December
16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in:
(i) mainland China of the PRC, and (ii) Hong Kong; and such report identified the specific registered public accounting firms which are
subject to these determinations. On August 26, 2022, the PCAOB signed a Statement of Protocol with the CSRC and China’s Ministry
of Finance (the “PRC MOF”) in respect of cooperation on the oversight of PCAOB-registered public accounting firms based in
mainland China and Hong Kong. Pursuant to the Statement of Protocol, the PCAOB conducted inspections on select registered public accounting
firms subject to the Determination Report in Hong Kong between September 2022 and November 2022. On December 15, 2022, the PCAOB board
announced that it has completed the inspections, determined that it had complete access to inspect or investigate completely registered
public accounting firms headquartered in mainland China and Hong Kong, and voted to vacate the Determination Report. Our auditor, ZH
CPA, LLC, the independent registered public accounting firm that issued the audit report included in this prospectus, as an auditor
of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States
pursuant to which the PCAOB conducts regular inspections to assess ZH CPA, LLC’s compliance with applicable professional standards.
ZH CPA, LLC is headquartered in Denver, Colorado, and can be inspected by the PCAOB. ZH CPA, LLC was not identified in the Determination
Report as a firm subject to the PCAOB’s determination. Notwithstanding the foregoing, in the event that, in the future, the PCAOB
determines that it is not able to fully conduct inspections of our auditor for three consecutive years, or the PCAOB re-evaluates its
determination as a result of any obstruction with the implementation of the Statement of Protocol in the future, trading of our securities
on a national securities exchange or in the over-the counter market may be prohibited under the HFCA Act and our access to the U.S. capital
markets may be limited or restricted. In addition, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies
Accountable Act (the “AHFCAA”), which, if passed by the U.S. House of Representatives and signed into law, would reduce the
period of time for foreign companies to comply with the PCAOB audits to two consecutive years instead of three, thus reducing the time
period for triggering the prohibition on trading. On December 29, 2022, the Consolidated Appropriations Act, 2023 (the “CAA”)
was signed into law by President Biden. The CAA contained, among other things, an identical provision to the AHFCAA, which reduces the
number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two.
The
delisting of our Ordinary Shares, or the threat of their being delisted, may materially and adversely affect the value of your investment.
See “Item 3. Key Information – D. Risk Factors — Risks Related to Our Ordinary Shares — Although the audit
report included in this prospectus is prepared by U.S. auditors who are currently inspectable by the PCAOB, there is no guarantee that
future audit reports will be prepared by auditors inspectable by the PCAOB and, as such, in the future investors may be deprived of the
benefits of the PCAOB inspection program. Furthermore, trading in our securities may be prohibited under the HFCA Act if the SEC subsequently
determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, and as a result, U.S.
national securities exchanges, such as the Nasdaq, may determine to delist our securities. Furthermore, on December 29, 2022, the Accelerating
Holding Foreign Companies Accountable Act was enacted, which amended the HFCA Act by requiring the SEC to prohibit an issuer’s
securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead
of three, and thus reduced the time before our Ordinary Shares may be prohibited from trading or delisted” set forth in our
most recent Annual Report on Form 20-F for the fiscal year ended September 30, 2023 on file with the SEC, which is incorporated by reference
into this prospectus.
No
regulatory approval is required for Globavend Holdings to transfer cash to its subsidiaries: subject to due corporate authorization in
accordance with the Memorandum and Articles of Association of Globavend Holdings and Globavend Holdings being solvent
and able to pay its debts, Globavend Holdings is permitted under the laws of the Cayman Islands and its Memorandum and Articles
of Association (as amended from time to time) to provide funding to our subsidiaries incorporated in the BVI and Hong Kong
through loans or capital contributions. Globavend Holdings’ subsidiary formed under the laws of the BVI is permitted under the
laws of the BVI to provide funding to our Hong Kong operating subsidiary Globavend HK subject to certain restrictions laid down in the
BVI Business Companies Act (as amended) and Memorandum and Articles of Association of the relevant Globavend Holdings’
subsidiary incorporated under the laws of the BVI. As a holding company, Globavend Holdings may rely on dividends and other distributions
on equity paid by its subsidiaries for its cash and financing requirements. According to the BVI Business Companies Act (as amended),
a BVI company may make dividends distribution to the extent that immediately after the distribution, the value of the company’s
assets exceeds its liabilities and that such company is able to pay its debts as they fall due. According to the Companies Ordinance
of Hong Kong, a Hong Kong company may only make a distribution out of profits available for distribution. If any of Globavend Holdings’
subsidiaries incur debt on its own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends
to Globavend Holdings. Additionally, as of the date of this prospectus, there are no further BVI or Hong Kong statutory restrictions
on the amount of funds which may be distributed by us by dividend. However, in the future, funds may not be available to fund operations
or for other use outside of Hong Kong, due to interventions in, or the imposition of restrictions and limitations on, our ability or
on our subsidiary’s ability by the PRC government to transfer cash. Any limitation on the ability of our subsidiary to make payments
to us could have a material adverse effect on our ability to conduct our business and might materially decrease the value of our Ordinary
Shares or cause them to be worthless. For a more detailed discussion of how the cash is transferred within our organization, see “Transfers
of Cash to and from Our Subsidiaries” on page 5 and “Item 3. Key Information – D. Risk Factors — Risks
Related to Our Ordinary Shares — We rely on dividends and other distributions on equity paid by our subsidiary to fund any cash
and financing requirements we may have. In the future, funds may not be available to fund operations or for other use outside of Hong
Kong, due to interventions in, or the imposition of restrictions and limitations on, our ability or our subsidiary by the PRC government
to transfer cash. Any limitation on the ability of our subsidiary to make payments to us could have a material adverse effect on our
ability to conduct our business and might materially decrease the value of our Ordinary Shares or cause them to be worthless”
set forth in our most recent Annual Report on Form 20-F for the fiscal year ended September 30, 2023 on file with the SEC, which is incorporated
by reference into this prospectus.
During
the years ended September 30, 2022 and 2023 and the six months ended March 31, 2024, Globavend Holdings and Globavend BVI have
not distributed any cash dividends or made any other cash distributions. During the six months ended March 31, 2024, Globavend HK has not distributed any cash dividends or made any other
cash distributions. During the year ended September 30, 2023, Globavend
HK declared cash dividends in the amount of US$1,474,359 (equivalent to HK$11,500,000) to our Controlling Shareholder. During the year
ended September 30, 2022, Globavend HK declared dividends in the amount of US$1,597,909 (equivalent to HK$12,463,692) to our Controlling
Shareholder, of which the amount of US$1,244,502 (equivalent to HK$9,707,117) has been distributed as cash dividends and the remaining
amount was offset with the amount due to Mr. Wai Yiu Yau, our Founder, Chairman of the Board and Chief Executive Officer.
We
do not have any current intentions to distribute further earnings. If we determine to pay dividends on any of our Ordinary Shares in
the future, as a holding company, we will be dependent on receipt of funds from our Hong Kong operating subsidiary Globavend HK by way
of dividend payments. See “Dividend Policy,” and “Consolidated Statements of Change in Shareholders’
Equity in the Report of Independent Registered Public Accounting Firm” for further details.
We
are an “emerging growth company” and a “foreign private issuer” as defined under the federal securities laws
and, as such, are subject to reduced public company reporting requirements. See “Prospectus Summary — Implications of
Being an Emerging Growth Company and a Foreign Private Issuer” for additional information.
Neither
the U.S. Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved
of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is , 2024.
TABLE
OF CONTENTS
No
one has been authorized to provide you with information that is different from that contained in this prospectus. This prospectus is
dated as of the date set forth on the cover hereof. You should not assume that the information contained in this prospectus is accurate
as of any date other than that date.
For
investors outside the United States: We have not done anything that would permit this offering or possession or distribution of this
prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform
yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.
Globavend
Holdings is incorporated under the laws of the Cayman Islands as an exempted company with limited liability and a majority of our outstanding
securities are owned by non-U.S. residents. Under the rules of the SEC we currently qualify for treatment as a “foreign private
issuer.” As a foreign private issuer, we will not be required to file periodic reports and financial statements with the SEC as
frequently or as promptly as domestic registrants whose securities are registered under the Exchange Act.
CONVENTIONS
THAT APPLY TO THIS PROSPECTUS
Unless
otherwise indicated or the context otherwise requires, all references in this prospectus to:
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“Articles”
or “Articles of Association” are to the amended and restated articles of association of our Company (as amended from
time to time) adopted on August 18, 2023, which has taken effect on November 10, 2023 and as amended, supplemented and/or otherwise
modified from time to time; |
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“AUD”
or “A$” are to Australian dollar(s), the lawful currency of Australia; |
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“BVI”
are to the British Virgin Islands; |
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“Companies
Act” are to the Companies Act (as revised) of the Cayman Islands, as amended, supplemented or otherwise modified from time
to time; |
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“Company,”
“we,” “us,” and “Globavend Holdings” are to Globavend Holdings Limited, an exempted company incorporated
in the Cayman Islands with limited liability on May 22, 2023; |
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“Controlling
Shareholder” are to Mr. Wai Yiu Yau, the ultimate beneficial owner of Ordinary Shares representing approximately 76.65%
of the issued capital of the Company as of the date of this prospectus. See “Management” and “Principal
Shareholders” for more information; |
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“COVID-19”
are to the Coronavirus Disease 2019; |
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“ELOC
Purchase Agreement” are to the equity purchase agreement, dated as of March 15, 2024, by and between Globavend Holdings
and the Investor; |
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“ELOC
Registration Rights Agreement” are to the registration rights agreement, dated as of March 15, 2024, by and between Globavend
Holdings and the Investor; |
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“Exchange
Act” are to the US Securities Exchange Act of 1934, as amended; |
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“Facility”
or “Equity Line of Credit” are to the ELOC Purchase Agreement and the ELOC Registration Rights Agreement, pursuant to
which Globavend Holdings may issue up to $20,000,000 of ELOC Shares; |
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“Investor”
or “Selling Shareholder” are to Square Gate Capital Master Fund, LLC – Series 1, a Delaware limited liability company; |
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“Globavend
HK” are to Globavend (HK) Limited, a company incorporated under the laws of Hong Kong with limited liability, an indirect wholly
owned subsidiary of Globavend Holdings and our sole operating subsidiary in Hong Kong; |
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“Globavend
BVI” are to Globavend Associates Limited, a BVI business company limited by shares incorporated in the BVI, a direct wholly
owned subsidiary of Globavend Holdings; |
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“HKD”
or “HK$” are to Hong Kong dollar(s), the lawful currency of Hong Kong; |
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“Hong
Kong” are to Hong Kong special administrative region of the People’s Republic of China; |
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“Independent
Third Party” are to a person or company who or which is independent of and is not a 5% beneficial owner of, does not control
and is not controlled by or under common control with any 5% beneficial owner and is not the spouse or descendant (by birth or adoption)
of any 5% owner of the Company; |
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“IPO”
are to an initial public offering of securities; |
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“Memorandum”
or “Memorandum
of Association” are to the amended and restated memorandum of association of our Company (as amended from time to time)
adopted on August 18, 2023, which has taken effect on November 10, 2023 and as amended, supplemented and/or otherwise modified from
time to time; |
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“Nasdaq”
are to Nasdaq Stock Market LLC; |
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“Ordinary
Shares” or “Shares” are to our ordinary shares, par value $0.001 per ordinary share; |
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“PCAOB”
are to Public Company Accounting Oversight Board; |
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“PRC”
or “China” are to the People’s Republic of China, and “mainland China”, unless otherwise specified
herein, are to the People’s Republic of China, excluding, for the purpose of this prospectus only, Taiwan, the Hong Kong Special
Administrative Region, and the Macau Administrative Region; |
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“PRC
government” or “PRC authorities”, or variations of such words or similar expressions, are to the central, provincial,
and local governments of all levels in mainland China, including regulatory and administrative authorities, agencies and commissions,
or any court, tribunal or any other judicial or arbitral body in mainland China, for the purposes of this prospectus only; |
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“PRC
laws” are to all applicable laws, statues, rules, regulations, ordinances and other pronouncements having the binding effect
of law in mainland China; |
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“SEC”
or “U.S. Securities and Exchange Commission” are to the United States Securities and Exchange Commission; |
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“Securities
Act” are to the US Securities Act of 1933, as amended; |
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“U.S.
dollars” or “US$” or “$” or “USD” or “dollars” are to United States dollar(s),
the lawful currency of the United States. |
We
have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals in
some tables may not be an arithmetic aggregation of the figures that preceded them.
Unless
the context indicates otherwise, all information in this prospectus assumes no exercise by the underwriters of their over-allotment option.
Globavend
Holdings is a holding company with operations conducted in Hong Kong through Globavend HK, our sole operating subsidiary in Hong Kong.
Globavend HK’s reporting currency is Hong Kong dollars. This prospectus contains translations of Hong Kong dollars into U.S. dollars
solely for the convenience of the reader.
Unless
otherwise noted, all translations from Hong Kong dollars to U.S. dollars and from U.S. dollars to Hong Kong dollars were calculated
at the buying rate of US$ = HK$7.8, being the pegged rate determined by the linked exchange rate system in Hong Kong. All
translations from Australian dollars to U.S. dollars and from U.S. dollars to Australian dollars, and from Euro to U.S. dollars and
from U.S. dollars to Euro in this prospectus were calculated at the noon buying rate of US$1 = A$0.67, and US$1 = €1.08,
respectively, as certified for customs purposes by the Federal Reserve Bank of New York on the last trading day of March 31, 2023
and 2024. No representation is made that the HK$, A$ or € amount represents or could have been, or could be, converted,
realized or settled into US$ at that rate, or at any other rate, respectively.
PROSPECTUS
SUMMARY
The
following summary highlights information contained elsewhere in this prospectus and does not contain all of the information you should
consider before investing in our Ordinary Shares. You should read the entire prospectus carefully, including “Risk Factors,”
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial
statements and the related notes thereto, in each case included in this prospectus. You should carefully consider, among other things,
the matters discussed in the section of this prospectus titled “Business” before making an investment decision. Unless the
context otherwise requires, all references to “Globavend Holdings,” “we,” “us,” “our,”
the “Company,” and similar designations refer to Globavend Holdings Limited, an exempted Cayman Islands company and its wholly
owned subsidiaries.
Business
Overview
We
are a holding company incorporated in the Cayman Islands with operations conducted by our Hong Kong subsidiary, Globavend HK. Since June
2023, we have established our principal executive office in Perth, Australia.
Founded
in 2016, we are an emerging e-commerce logistics provider providing end-to-end logistics solution in Hong Kong, Australia and
New Zealand. Our business spans Hong Kong, four cities in Australia and in New Zealand through our own business presence and the
presence of our service providers. Our customers are primarily enterprise customers, being e-commerce merchants, or operators of e-commerce
platforms, in providing business-to-consumer (B2C) transactions.
As
an e-commerce logistics provider, we provide integrated cross-border logistics services from Hong Kong to Australia and New Zealand,
where we provide customers with a one-stop solution, from pre-carriage parcel drop off to parcel consolidation, air freight forwarding,
customs clearance, on-carriage parcel transportation and delivery. We rely on our own proprietary all-in-one shipping solution,
which has been or can be connected to the customer’s own IT systems (such as enterprise resource planning (ERP) systems, customer
relationship management (CRM) systems, booking management systems or point of sale (POS) systems) on one end and the transportation management
systems (TMS) of our ground transportation service providers on the other end, to facilitate effective logistics management.
Other
than integrated cross-border logistics services, we also provide fragmented logistics services, which typically include freight forwarding
services, to customers and enterprises at their own choice.
Our
revenue for the years ended September 30, 2022 and 2023 and for the six months ended March 31, 2023 and 2024 are $24,021,196,
$18,586,528, $9,400,570 and $8,384,790, respectively.
The
Equity Line of Credit
On
March 15, 2024, we entered into the ELOC Purchase Agreement with the Investor establishing the Facility. Pursuant to and subject to the
conditions set forth in the ELOC Purchase Agreement, beginning on March 15, 2024 (the “Commencement Date”), we have the right
from time to time at our option to direct the Investor to purchase the ELOC Shares up to a maximum aggregate purchase price of $20 million
(the “Maximum Commitment Amount”), subject to certain limitations and conditions set forth in the ELOC Purchase Agreement.
Sales of the ELOC Shares to the Investor under the ELOC Purchase Agreement, and the timing of any sales, will be determined by us from
time to time in our sole discretion and will depend on a variety of factors, including, among other things, market conditions, the trading
price of our Ordinary Shares and determinations by us regarding the use of proceeds from any sale of such ELOC Shares. The net proceeds
from any sales under the Facility will depend on the frequency with, and prices at, which the ELOC Shares are sold to the Investor. To
the extent we sell shares under the ELOC Purchase Agreement, we currently plan to use any proceeds therefrom for working capital and
general corporate purposes.
On
June 4, 2024, we issued the Initial Commitment Shares to the Investor as consideration for its entry into the ELOC Purchase
Agreement. Other than that, the Investor paid no cash consideration for the Initial Commitment Shares. Accordingly, any proceeds
received by the Investor upon its sale of the Initial Commitment Shares would be profit. As of the date of this prospectus, no other
Ordinary Shares have been issued to the Investor.
In
accordance with our obligations under the ELOC Purchase Agreement and the ELOC Registration Rights Agreement, we have filed the
registration statement of which this prospectus forms a part in order to register the resale by the Investor of (i) up to $20 million of ELOC Shares that we may elect, in our sole
discretion, to issue and sell to the Investor, from time to time from and after the Commencement Date under the ELOC Purchase Agreement, (ii) 306,123 Initial Commitment Shares and (iii) up to 306,123 True-Up Shares to be issued
if the product of (x) the closing price of the Ordinary Shares on the trading day following the Lock-Up Termination Date and (y) the number
of Initial Commitment Shares is less than $300,000, and then only to the extent to cause the value of the Commitment Shares to be $300,000
on such date. Unless earlier terminated, the ELOC Purchase Agreement will remain in effect until the earlier of: (i) March 15, 2027, i.e., the expiry of the 36-month period
commencing on the date of the ELOC Purchase Agreement, or (ii) the date to which the Investor has purchased the Maximum Commitment Amount (the “Commitment Period”).
Under
applicable Nasdaq rules and the terms of the ELOC Purchase Agreement, the Investor shall not purchase any ELOC Shares under the
ELOC Purchase Agreement if such shares, when aggregated with all other Ordinary Shares then beneficially owned by the Investor and its
affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule13d-3 promulgated thereunder), would result in the Investor
beneficially owning Ordinary Shares in excess of the lesser of (i) 4.99% of the number of Ordinary Shares outstanding immediately after giving effect to the issuance
of Ordinary Shares issuable pursuant to a Put Notice (as defined in the ELOC Purchase Agreement), and (ii) 19.99% of the Ordinary Shares
outstanding as of the date the applicable Put Notice is submitted, excluding Ordinary Shares held by our “affiliates” (as
such term is defined in Rule 405 of the Securities Act).
The
ELOC Purchase Agreement and the ELOC Registration Rights Agreement contain customary registration rights, representations, warranties,
conditions and indemnification obligations by each party. The representations, warranties and covenants contained in the ELOC Purchase
Agreement were made only for purposes of the ELOC Purchase Agreement and as of specific dates, were solely for the benefit of the parties
to such agreements and are subject to certain important limitations.
Competitive
Strengths
We
believe the following competitive strengths differentiate us from our competitors:
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We
are an IATA accredited cargo agent;
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We
have a stable business relationship with air freight carriers which enhances our competitiveness in our business; |
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We
have established a strong presence in Australia and New Zealand; |
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We
offer cost-efficient customizable, one-stop integrated cross-border logistics and air freight forwarding services to accommodate
our customers’ various logistics needs; |
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Our
proprietary all-in-one shipping solution provides operational efficiency and facilitates effective logistics management; |
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Our
management and staff have extensive experience and in-depth industry knowledge. |
Our
Strategies
We
intend to pursue the following strategies to further expand our business:
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Enhance
our business presence in Hong Kong, Australia and New Zealand; |
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Enhance
the use of information technology into intelligent delivery and collection solutions; |
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Expand
our logistics services into different verticals of the logistics supply chain; |
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Upgrade
our warehousing facilities; |
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Pursue
strategic alliances and select acquisition opportunities; |
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Further
enhance our sales and marketing effort using “big data” and additional sales personnel. |
Corporate
History and Structure
The
Company is an exempted company with limited liability incorporated under the laws of the Cayman Islands that wholly-owns our subsidiary,
Globavend Associates Limited (“Globavend BVI”), a company incorporated under the laws of the BVI, that in turn wholly owns
Globavend HK, our subsidiary in Hong Kong.
On
November 10, 2023, the Company completed its IPO and listed its Ordinary Shares on the Nasdaq Capital Market under the symbol
“GVH”. In connection with the IPO, the Company received aggregate gross proceeds of $6,000,000, prior to deducting
underwriting discounts and other offering expenses and received proceeds of $5,379,500 after deducting underwriting discounts and
other offering expenses of $620,500. The proceeds of $5,379,500 were recorded in additional paid in capital with
total offering cost of $2,415,444 against additional paid in capital.
For more detail of our corporate history, please refer to “Item
4. Information on the Company – A. History and Development of the Company” set forth in our most recent Annual Report
on Form 20-F for the fiscal year ended September 30, 2023 on file with the SEC, which is incorporated by reference into this prospectus.
The
charts below illustrate our corporate structure and subsidiaries as of the date of this prospectus:
We
are registering for resale by the Investor the ELOC Shares in an offering amount of up to $20,000,000.00, together with (i)
306,123 Ordinary Shares that have been issued by us to the Investor as Initial Commitment Shares and (ii) up to 306,123
Ordinary Shares that may be issued by us to the Investor, pursuant to the ELOC Purchase Agreement.
We
are a “controlled company” as defined under the Nasdaq Stock Market Rules because, as of the date of this prospectus,
our Controlling Shareholder owns approximately 76.65% of our total issued and outstanding Shares, representing approximately 76.65%
of the total voting power.
Holding
Company Structure
Globavend
Holdings is a holding company incorporated in the Cayman Islands with no material operations of its own, and we conduct our operations
primarily in Hong Kong through Globavend HK, our sole operating subsidiary as of the date of this prospectus. This is an offering of
the Ordinary Shares of Globavend Holdings, the holding company in the Cayman Islands, instead of the shares of Globavend HK. Investors
in this offering will not directly hold any equity interests in Globavend HK.
As
a result of our corporate structure, Globavend Holdings’ ability to pay dividends may depend upon dividends paid by Globavend HK.
If our existing operating subsidiary Globavend HK or any newly formed ones incur debt on their own behalf in the future, the instruments
governing their debt may restrict their ability to pay dividends to us.
Transfers
of Cash To and From Our Subsidiaries
Our
management monitors the cash position of Globavend HK regularly and prepares budgets on a monthly basis to ensure it has the necessary
funds to fulfill its obligations for the foreseeable future and to ensure adequate liquidity. In the event that there is a need for cash
or a potential liquidity issue, it will be reported to our Chief Financial Officer and subject to approval by our board of directors.
The
ability of Globavend Holdings to transfer cash to its subsidiaries is subject to the following: subject to due corporate authorization
in accordance with the Memorandum and Articles of Association of Globavend Holdings and Globavend Holdings being
solvent and able to pay its debts, Globavend Holdings is permitted under the laws of the Cayman Islands and its Memorandum and
Articles of Association (as amended from time to time) to provide funding to our subsidiaries incorporated in the BVI and
Hong Kong through loans or capital contributions. Globavend Holdings’ subsidiary formed under the laws of the BVI is permitted
under the laws of the BVI to provide funding to our Hong Kong operating subsidiary Globavend HK subject to certain restrictions laid
down in the BVI Business Companies Act (as amended) and Memorandum and Articles of Association of the relevant Globavend
Holdings’ subsidiary incorporated under the laws of the BVI.
The
ability of Globavend BVI, the direct subsidiary of Globavend Holdings, to transfer cash to Globavend Holdings is subject to the following:
according to the BVI Business Companies Act (as amended), Globavend BVI may make dividends distribution to the extent that immediately
after the distribution, the value of the company’s assets exceeds its liabilities and that such company is able to pay its debts
as they fall due.
The
ability of Globavend HK to transfer cash to Globavend BVI is subject to the following: according to the Companies Ordinance of Hong Kong,
Globavend HK may only make a distribution out of profits available for distribution. We did not adopt or maintain any cash management
policies and procedures as of the date of this prospectus.
Currently,
all of our operations are in Hong Kong. Hong Kong is a special administrative region of the PRC and the basic policies of the PRC regarding
Hong Kong are reflected in the Basic Law. The arrangement provides Hong Kong with a high degree of autonomy and executive, legislative
and independent judicial powers, including that of final adjudication under the principle of “one country, two systems” and
a distinct set of laws and regulations. The laws and regulations of mainland China do not currently have any material impact on any
transfer of cash from Globavend Holdings to Globavend HK or from Globavend HK to Globavend Holdings and the investors in the U.S.
During
the years ended September 30, 2022 and 2023 and the six months ended March 31, 2024, Globavend Holdings and Globavend BVI have
not distributed any cash dividends or made any other cash distributions. During the six months ended March 31, 2024, Globavend HK has not distributed any cash dividends or made any other
cash distributions. During the year ended September 30, 2023, Globavend
HK declared cash dividends in the amount of US$1,474,359 (equivalent to HK$11,500,000) to our Controlling Shareholder. During the year
ended September 30, 2022, Globavend HK declared dividends in the amount of US$1,597,909 (equivalent to HK$12,463,692) to our Controlling
Shareholder, in which the amount of US$1,244,502 (equivalent to HK$9,707,117) has been distributed as cash dividends and the remaining
amount was offset with the amount due to Mr. Yau.
We
currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not
anticipate declaring or paying any dividends in the foreseeable future. Any future determination related to our dividend policy will
be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements,
contractual requirements, business prospects and other factors the board of directors deems relevant, and subject to the restrictions
contained in any future financing instruments.
If
we determine to pay dividends on any of our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds
from our subsidiaries by way of dividend payments. Subject to due corporate authorization in accordance with the Memorandum and
Articles of Association of Globavend Holdings and Globavend Holdings being solvent and able to pay its debts, Globavend
Holdings is permitted under the laws of Cayman Islands and its Memorandum and Articles of Association (as amended
from time to time) to provide funding to its subsidiaries through loans or capital contributions. Globavend HK is permitted under
the laws of Hong Kong to provide funding to Globavend Holdings through dividend distributions subject to certain statutory requirements
of having sufficient profits.
Subject
to Hong Kong law, the Companies Act and our Memorandum and Articles of Association, our Company in general meeting may declare dividends
in any currency, but no dividends shall be declared in excess of the amount recommended by our board of directors. Subject to a solvency
test, as prescribed in the Companies Act, and the provisions, if any, of the company’s memorandum and articles of association,
a company may pay dividends and distributions out of its share premium account. In addition, dividends may be paid out of profits available
on a company level. The Cayman Islands does not impose a withholding tax on payments of dividends to shareholders in the Cayman Islands.
Under
Hong Kong law, dividends could only be paid out of distributable profits (that is, accumulated realized profits less accumulated realized
losses) or other distributable reserves, as permitted under Hong Kong law. Dividends cannot be paid out of share capital. There are no
restrictions or limitation under the laws of Hong Kong imposed on the conversion of HK dollar into foreign currencies and the remittance
of currencies out of Hong Kong, nor is there any restriction on foreign exchange to transfer cash between Globavend Holdings and
its subsidiaries, across borders and to U.S. investors, nor are there any restrictions and limitations to distribute earnings
from our business and subsidiaries, to Globavend Holdings and U.S. investors and amounts owed. Under the current practice of the Inland
Revenue Department of Hong Kong, no tax is payable in Hong Kong with respect to dividends paid by us. Further, there are no restrictions
or limitation under the laws of Hong Kong imposed on the conversion of HK$ into foreign currencies and the remittance of currencies out
of Hong Kong or across borders and to U.S. investors. Any limitation on the ability of our subsidiary to make payments to us could
have a material adverse effect on our ability to conduct our business and might materially decrease the value of our Ordinary Shares
or cause them to be worthless. Currently, all of our operations are in Hong Kong through Globavend HK. We do not have or intend to set
up any subsidiary or enter into any contractual arrangements to establish a VIE structure with any entity in mainland China. Hong Kong
is a special administrative region of the PRC and the basic policies of the PRC regarding Hong Kong are reflected in the Basic Law of
the Hong Kong Special Administrative Region of the People’s Republic of China, or the Basic Law, providing Hong Kong with a high
degree of autonomy and executive, legislative and independent judicial powers, including that of final adjudication under the principle
of “one country, two systems.” The PRC laws and regulations do not currently have any material impact on any transfer
of cash from Globavend Holdings to Globavend HK or from Globavend HK to Globavend Holdings and the investors in the U.S. However, the
Chinese government may, in the future, impose restrictions or limitations on our ability to transfer money out of Hong Kong, to distribute
earnings and pay dividends to and from the other entities within our organization, or to reinvest in our business outside of Hong Kong.
Such restrictions and limitations, if imposed in the future, may delay or hinder the expansion of our business outside of Hong Kong and
may affect our ability to receive funds from our operating subsidiary in Hong Kong. The promulgation of new laws or regulations, or the
new interpretation of existing laws and regulations, in each case, that restrict or otherwise unfavorably impact the ability or way we
conduct our business, could require us to change certain aspects of our business to ensure compliance, which could decrease demand for
our services, reduce revenues, increase costs, require us to obtain more licenses, permits, approvals or certificates, or subject us
to additional liabilities. To the extent any new or more stringent measures are required to be implemented, our business, financial condition
and results of operations could be adversely affected and such measures could materially decrease the value of our Ordinary Shares,
potentially rendering it worthless.
See
“Dividend Policy” of this prospectus and “Item 3. Key Information – D. Risk Factors — Risks Related
to Our Ordinary Shares — We rely on dividends and other distributions on equity paid by our subsidiary to fund any cash and financing
requirements we may have. In the future, funds may not be available to fund operations or for other uses outside of Hong Kong, due to
interventions in, or the imposition of restrictions and limitations on, our ability or our subsidiary by the PRC government to transfer
cash. Any limitation on the ability of our subsidiary to make payments to us could have a material adverse effect on our ability to conduct
our business and might materially decrease the value of Ordinary Shares or cause them to be worthless,” set forth in our most
recent Annual Report on Form 20-F for the fiscal year ended September 30, 2023 on file with the SEC, which is incorporated by reference
into this prospectus, and Consolidated Statements of Change in Shareholders’ Equity in audited financial statements contained in
this prospectus for more information.
Enforceability
of Civil Liabilities
We
are incorporated under the laws of the Cayman Islands as an exempted company with limited liability.
We
have appointed Cogency Global Inc. as our agent upon whom process may be served in any action brought against us under the securities
laws of the United States.
Conyers
Dill & Pearman, our counsel as to the laws of the Cayman Islands, has advised us that there is uncertainty as to whether the courts
of the Cayman Islands would (i) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers predicated
upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (ii) entertain
original actions brought in the Cayman Islands against us or our directors or officers predicated upon the securities laws of the United
States or any state in the United States.
Conyers
Dill & Pearman has informed us that the courts of the Cayman Islands would recognize as a valid judgment, a final and conclusive
judgment in personam obtained in the foreign courts against our Company under which a sum of money is payable (other than a sum
of money payable in respect of multiple damages, taxes or other charges of a like nature or in respect of a fine or other penalty) or,
in certain circumstances, an in personam judgment for non-monetary relief, and would give a judgment based thereon provided that
(a) such courts had proper jurisdiction over the parties subject to such judgment; (b) such courts did not contravene the rules of natural
justice of the Cayman Islands; (c) such judgment was not obtained by fraud; (d) the enforcement of the judgment would not be contrary
to the public policy of the Cayman Islands; (e) no new admissible evidence relevant to the action is submitted prior to the rendering
of the judgment by the courts of the Cayman Islands; and (f) there is due compliance with the correct procedures under the laws of the
Cayman Islands.
Substantially
all of our assets are located outside the United States. In addition, a majority of our directors and officers are nationals or residents
of jurisdictions other than the United States and all or a substantial portion of their assets are located outside the United States.
As
a result, it may be difficult for investors to effect service of process within the United States upon us or these persons or to enforce
judgments obtained in U.S. courts against us or them, including judgments predicated upon the civil liability provisions of the securities
laws of the United States or any state in the United States. It may also be difficult for you to enforce judgments obtained in U.S. courts
based on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors.
Name |
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Position |
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Nationality |
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Residence |
Mr.
Wai Yiu Yau |
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Chairman
of the Board and Chief Executive Officer |
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Chinese |
|
Australia |
Mr.
Tsz Ngo Yu |
|
Chief
Financial Officer |
|
Chinese |
|
Hong
Kong |
Ms.
San Man Leng |
|
Independent
Director |
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United
States |
|
Hong
Kong |
Mr.
Ho Chuen Shin |
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Independent
Director |
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Chinese |
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Hong
Kong |
Mr.
Fan Cheung |
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Independent
Director |
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Chinese |
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Hong
Kong |
There
is uncertainty as to whether the courts of Hong
Kong would (i) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers predicated upon the civil
liability provisions of the securities laws of the United States or any state in the United States, or (ii) entertain original actions
brought in Hong Kong against us or our directors or officers predicated upon the securities laws of the United States or any state in
the United States.
A
judgment of a court in the United States predicated upon U.S. federal or state securities laws may be enforced in Hong Kong at common
law by bringing an action in a Hong Kong court on that judgment for the amount due thereunder, and then seeking summary judgment on the
strength of the foreign judgment, provided that the foreign judgment, among other things, is (1) for a debt or a definite sum of money
(not being taxes or similar charges to a foreign government taxing authority or a fine or other penalty), and (2) final and conclusive
on the merits of the claim, but not otherwise. Such a judgment may not, in any event, be so enforced in Hong Kong if (a) it was obtained
by fraud, (b) the proceedings in which the judgment was obtained were opposed to natural justice, (c) its enforcement or recognition
would be contrary to the public policy of Hong Kong, (d) the court of the United States was not jurisdictionally competent, or the judgment
was in conflict with a prior Hong Kong judgment.
Hong
Kong has no arrangement for the reciprocal enforcement of judgments with the United States. As a result, there is uncertainty as to the
enforceability in Hong Kong, in original actions or in actions for enforcement, of judgments of U.S. courts of civil liabilities predicated
solely upon the federal securities laws of the United States or the securities laws of any state or territory within the United States.
Summary
of Key Risks
Our
business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may materially
and adversely affect our business, financial condition, results of operations, cash flows, and prospects that you should consider before
making a decision to invest in our Ordinary Shares. These risks are discussed more fully in “Risk Factors.” These
risks include, but are not limited to, the following:
Risks
Related to the Equity Line of Credit (for a more detailed discussion, see “Risk Factors — Risks Related to the
Equity Line of Credit” beginning on page 16 of this prospectus) |
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The
sale of a substantial amount of ELOC Shares in the public market could adversely affect the prevailing market price of our Ordinary
Shares. |
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It
is not possible to predict the actual number of ELOC Shares, if any, we will sell under the ELOC Purchase Agreement to the Investor,
or the actual gross proceeds resulting from those sales. |
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Investors
who buy ELOC Shares from the Investor at different times will likely pay different prices. |
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We
may use proceeds from sales of our ELOC Shares made pursuant to the ELOC Purchase Agreement in ways with which you may not agree
or in ways which may not yield a significant return. |
Risks Related to Our Business and Industry (for a more detailed discussion, see “Item 3. Key Information – D. Risk Factors — Risks Related to Our Business and Industry” set forth in our most recent Annual Report on Form 20-F for the fiscal year ended September 30, 2023 on file with the SEC, which is incorporated by reference into this prospectus.)
Risks
Related to Doing Business in Hong Kong (for a more detailed discussion, see “Item 3. Key Information – D. Risk Factors
— Risks Related to Doing Business in Hong Kong” set forth in our most recent Annual Report on Form 20-F for the fiscal year
ended September 30, 2023 on file with the SEC, which is incorporated by reference into this prospectus.)
Risks
Related to Our Ordinary Shares (for a more detailed discussion, see “Item 3. Key Information – D. Risk Factors —
Risks Related to our Ordinary Shares” set forth in our most recent Annual Report on Form 20-F for the fiscal year ended September
30, 2023 on file with the SEC, which is incorporated by reference into this prospectus.)
Recent
Regulatory Developments in the PRC
We
are aware that, recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations
in certain areas in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing
supervision over China-based companies listed overseas using VIE structures, adopting new measures to extend the scope of cybersecurity
reviews, and expanding the efforts in anti-monopoly enforcement. For example, on July 6, 2021, the General Office of the Communist Party
of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities
in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant
governmental authorities to strengthen cross-border oversight of law enforcement and judicial cooperation, to enhance supervision over
China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities
laws. On July 10, 2021, the CAC issued a revised draft of the Measures for Cybersecurity Review for public comments (the “Revised
Draft”), which required that, in addition to “operators of critical information infrastructure,” any “data processor”
controlling personal information of no less than one million users which seeks to list in a foreign stock exchange should also be subject
to cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant
activities.
On
December 24, 2021, the CSRC released the Administrative Provisions of the State Council Regarding the Overseas Issuance and Listing of
Securities by Domestic Enterprises (Draft for Comments) (the “Draft Administrative Provisions”) and the Measures for the
Overseas Issuance of Securities and Listing Record-Filings by Domestic Enterprises (Draft for Comments) (together with the Draft Administrative
Provisions, the “Draft Rules Regarding Overseas Listing”). The Draft Rules Regarding Overseas Listing lays out the filing
regulation arrangements for both direct and indirect overseas listings and clarifies the determination criteria for indirect
overseas listings in overseas markets. Among other things, if a domestic enterprise intends to indirectly offer and list securities
in an overseas market, the record-filing obligation is with a major operating entity incorporated in the PRC, and such filing obligation
shall be completed within three working days after the overseas listing application is submitted. The required filing materials for an
IPO and listing shall include, but not be limited to regulatory opinions, record filing, approval, other documents issued by competent
regulatory authorities of relevant industries (if applicable), and security assessment opinions issued by relevant regulatory authorities
(if applicable). On December 27, 2021, the National Development and Reform Commission (“NDRC”) and the Ministry of Commerce
jointly issued the Special Administrative Measures for Entry of Foreign Investment (Negative List) (2021 Version) (“Negative List”),
which became effective and replaced the previous version. Pursuant to the Negative List, if a PRC company, which engages in any business
where foreign investment is prohibited under the Negative List, or prohibited businesses seeks an overseas offering or listing, it must
obtain the approval from competent governmental authorities. Based on a set of Q&A published on the NDRC’s official website,
a NDRC official indicated that after a PRC company submits its application for overseas listing to the CSRC and where matters relating
to prohibited businesses under the Negative List are implicated, the CSRC will consult the regulatory authorities having jurisdiction
over the relevant industries and fields.
On
January 4, 2022, the CAC, the NDRC, and several other administrations jointly adopted and published the revised Cybersecurity Review
Measures (“CRM”), which took effect on February 15, 2022, and replaced the Revised Draft issued on July 10, 2021. Pursuant
to the revised CRM, if a network platform operator holding personal information of over one million users seeks for “foreign”
listing, it must apply for the cybersecurity review. In addition, operators of critical information infrastructure purchasing network
products and services are also obligated to apply for the cybersecurity review for such purchasing activities. Although the CRM provides
no further explanation on the extent of “network platform operator” and “foreign” listing, we do not believe
we are obligated to apply for a cybersecurity review pursuant to the revised CRM, considering that (i) we are not in possession of or
otherwise holding personal information of over one million users, and it is also very unlikely that we will reach such threshold in the
near future; and (ii) as of the date of this prospectus, we have not received any notice or determination from applicable PRC governmental
authorities identifying it as a critical information infrastructure operator.
On
February 17, 2023, the China Securities Regulatory Commission, or the CSRC, as approved by the State Council, released the Trial Measures
for Administration of Overseas Securities Offerings and Listings by Domestic Companies and five interpretive guidelines (collectively,
the “CSRC Filing Rules”), which came into effect on March 31, 2023. Under the CSRC Filing Rules, a filing-based regulatory
system shall be applied to “indirect overseas offerings and listings” of PRC domestic companies, which refers to securities
offerings and listings in an overseas market made under the name of an offshore entity but based on the underlying equity, assets, earnings
or other similar rights of a domestic company that operates its main business domestically. The CSRC Filing Rules state that, any post-listing
follow-on offering by an issuer in the same overseas market, including issuance of shares, convertible notes and other similar securities,
shall be subject to filing requirement within three business days after the completion of the offering. We believe that we are not subject
to the CSRC Filing Rules, because we are incorporated in the Cayman Islands and our subsidiaries are incorporated in Hong Kong, the British
Virgin Islands and operate in Hong Kong without any subsidiary or VIE structure in mainland China, and we do not have any business operations
or maintain any office or personnel in mainland China. However, as the CSRC Filing Rules and the supporting guidelines are newly published,
there exists uncertainty with respect to the implementation and interpretation of the principle of “substance over form.”
If our offering and listing is later deemed as “indirect overseas offering and listing by companies in mainland China” under
the CSRC Filing Rules, we may need to complete the filing procedures for our offering and listing. If we are subject to the filing requirements,
we cannot assure you that we will be able to complete such filings in a timely manner or even at all. Since these statements and regulatory
actions are new, it is highly uncertain how soon the legislative or administrative regulation making bodies will respond or what existing
or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any. It is also highly
uncertain what the potential impact such modified or new laws and regulations will have on Globavend Holdings’ daily business operations,
its ability to accept foreign investments, and the listing of our Ordinary Shares on a U.S. or other foreign exchange. There remains
significant uncertainty in the interpretation and enforcement of relevant PRC cybersecurity laws and regulations. If the CSRC Filing
Rules become applicable to Globavend HK or if the Measures for Cybersecurity Review (2021) or the PRC Personal Information Protection
Law becomes applicable to Globavend HK, the business operation of Globavend HK and the listing of our Ordinary Shares in the United States
could be subject to the CAC’s cybersecurity review or CSRC Overseas Issuance and Listing review in the future. If the applicable
laws, regulations, or interpretations change and Globavend HK becomes subject to the CAC or CSRC review, we cannot assure you that Globavend
HK will be able to comply with the regulatory requirements in all respects, and our current practice of collecting and processing personal
information may be ordered to be rectified or terminated by regulatory authorities. If Globavend HK fails to receive or maintain such
permissions or if the required approvals are denied, Globavend HK may become subject to fines and other penalties that may have a material
adverse effect on our business, operations, and financial condition and may hinder our ability to offer or continue to offer Ordinary
Shares to investors and cause the value of our Ordinary Shares to significantly decline or be worthless.
Permission
Required from Hong Kong and PRC Authorities
As
of the date of this prospectus, (i) Globavend HK has received all requisite permissions and approvals for the operation of our business
in Hong Kong namely the business registration certificate issued by the Hong Kong Business Registration Office, and no such permissions
and approvals have been denied, (ii) Globavend HK is not required to obtain any permission or approval from Hong Kong authorities to
issue our Ordinary Shares to foreign investors, and (iii) we are also not required to obtain permissions or approvals from any PRC authorities
before listing in the United States and to issue our Ordinary Shares to foreign investors or operate our business as currently conducted,
including the CSRC, the CAC, or any other governmental agency that is required to approve our operations, because (i) the CSRC currently
has not issued any definitive rule or interpretation concerning whether offerings like ours under this prospectus are subject to this
regulation; and (ii) Globavend HK was established and operates in Hong Kong and is not included in the categories of industries
and companies whose foreign securities offerings are subject to review by the CSRC or the CAC.
Hong
Kong is a special administrative region of the PRC and the basic policies of the PRC regarding Hong Kong are reflected in the Basic Law,
which serves as Hong Kong’s constitution. The Basic Law provides Hong Kong with a high degree of autonomy and executive, legislative
and independent judicial powers, including that of final adjudication under the principle of “one country, two systems” and
a distinct set of laws and regulations. The PRC laws and regulations do not currently have any material impact on our business, financial
condition or results of operations. However, there is no assurance that there will not be any changes in the economic, political and
legal environment in Hong Kong in the future. In the event that (i) the PRC government expanded the categories of industries and companies
whose foreign securities offerings are subject to review by the CSRC or the CAC and that we are required to obtain such permissions or
approvals, (ii) we inadvertently concluded that relevant permissions or approvals were not required or that we did not receive or maintain
relevant permissions or approvals required, or (iii) applicable laws, regulations, or interpretations change and require us to obtain
such permissions or approvals in the future, we may face regulatory risks as those operated in mainland China, including the ability
to offer securities to investors, list their securities on a U.S. or other foreign exchanges, conduct their business or accept foreign
investment or sanctions by the CSRC, the CAC, or other PRC regulatory agencies.
Recent
PCAOB Developments
On
May 20, 2020, the U.S. Senate passed the HFCA Act, which includes requirements for the SEC to identify issuers whose audit work is performed
by auditors that the PCAOB is unable to inspect or investigate completely because of a restriction imposed by a non-U.S. authority in
the auditor’s local jurisdiction. The U.S. House of Representatives passed the HFCA Act on December 2, 2020, and the HFCA Act was
signed into law on December 18, 2020. Pursuant to the HFCA act, our securities may be prohibited from trading on the Nasdaq or other
U.S. stock exchanges if our auditor cannot be inspected by the PCAOB for three consecutive years, and this ultimately could result in
our Ordinary Shares being delisted.
On
March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements
of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection”
year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA
Act, including the listing and trading prohibition requirements described above.
On
June 22, 2021, the U.S. Senate passed a bill that, if passed by the U.S. House of Representatives and signed into law, would reduce the
number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two years.
On
December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act,
which took effect on January 10, 2022. The rules apply to registrants that the SEC identifies as having filed an annual report with an
audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable
to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.
On
December 16, 2021, the PCAOB issued a Determination Report, which found that the PCAOB is unable to inspect or investigate completely
registered public accounting firms headquartered in mainland China of the PRC or Hong Kong, a special administrative region and dependency
of the PRC, because of a position taken by one or more authorities in the PRC or Hong Kong. The PCAOB made its determinations pursuant
to PCAOB Rule 6100, which provides a framework for how PCAOB fulfills its responsibilities under the HFCA Act.
Our
auditor, ZH CPA, LLC, the independent registered public accounting firm that issues the audit report included elsewhere in this prospectus,
as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in
the United States pursuant to which the PCAOB conducts regular inspections to assess our auditor’s compliance with the applicable
professional standards. ZH CPA, LLC is headquartered in Denver, Colorado, and can be inspected by the PCAOB. As of the date of this prospectus,
our auditor is not subject to the determinations announced by the PCAOB on December 16, 2021 in mainland China or Hong Kong because of
a position taken by one or more authorities in the PRC or Hong Kong.
On
August 26, 2022, the SEC issued a statement announcing that the PCAOB signed a Statement of Protocol with the CSRC and the Ministry of
Finance of the PRC, governing inspections and investigations of audit firms based in mainland China and Hong Kong. Pursuant to the Statement
of Protocol, the PCAOB has independent discretion to select any issuer audits for inspection or investigation and has unfettered ability
to transfer information to the SEC. According to the PCAOB, its December 2021 determinations under the HFCA Act remain in effect.
On
December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered
public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary.
However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will
consider the need to issue a new determination.
On
December 29, 2022, the CAA was signed into law by President Biden. The CAA contained, among other things, an identical provision to the
AHFCAA, which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from
three years to two.
Implications
of Being a Controlled Company
We
are a “controlled company” as defined under the Nasdaq Stock Market Rules because, as of the date of this prospectus,
our Controlling Shareholder owns approximately 76.65% of our total issued and outstanding Shares, representing approximately 76.65%
of the total voting power. As a result, we may rely on exemptions from certain corporate governance requirements that provide
protection to shareholders of other companies.
For
so long as we are a controlled company under that definition, we are permitted to elect to rely, and may rely, on certain exemptions
from corporate governance rules, including:
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an
exemption from the rule that a majority of our board of directors must be independent directors; |
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an
exemption from the rule that the compensation of our chief executive officer must be determined or recommended solely by independent
directors; and |
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an
exemption from the rule that our director nominees must be selected or recommended solely by independent directors. |
As
a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance
requirements. Although we do not intend to rely on the “controlled company” exemption under the Nasdaq listing rules, we
could elect to rely on this exemption. If we elected to rely on the “controlled company” exemption, a majority of the members
of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees
might not consist entirely of independent directors. See “Risk Factors — Risks Related to Our Ordinary Shares and This
Offering — As a “controlled company” under the rules of the Nasdaq Capital Market, we may choose to exempt our Company
from certain corporate governance requirements that could have an adverse effect on our public shareholders.”
Implications
of Being an Emerging Growth Company and a Foreign Private Issuer
As
a company with less than US$1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company”
as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”), enacted in April 2012, and may take advantage of
reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:
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being
permitted to present only two years of audited financial statements and only two years of related Management’s Discussion and
Analysis of Financial Condition and Results of Operations in our filings with the SEC; |
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being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting; |
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reduced
disclosure obligations regarding executive compensation in periodic reports, proxy statements, and registration statements; and |
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exemptions
from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute
payments not previously approved. |
We
may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first
sale of our Ordinary Shares pursuant to our IPO in November 2023. However, if certain events occur before the end of such five-year
period, including if we become a “large accelerated filer,” our annual gross revenues exceed US$1.235 billion, or we issue
more than US$1 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company before the end
of such five-year period.
In
addition, Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition
period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. We have elected to
take advantage of the extended transition period for complying with new or revised accounting standards and acknowledge such election
is irrevocable pursuant to Section 107 of the JOBS Act.
We
are a foreign private issuer as defined by the SEC. As a result, in accordance with the rules and regulations of the Nasdaq, we may comply
with home country governance requirements and certain exemptions thereunder rather than complying with Nasdaq corporate governance standards.
We may choose to take advantage of the following exemptions afforded to foreign private issuers:
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Exemption
from filing quarterly reports on Form 10-Q or provide current reports on Form 8-K disclosing significant events within four days
of their occurrence. |
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Exemption
from Section 16 rules regarding sales of Ordinary Shares by insiders, which will provide less data in this regard than shareholders
of U.S. companies that are subject to the Exchange Act. |
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Exemption
from the Nasdaq rules applicable to domestic issuers requiring disclosure within four business days of any determination to grant
a waiver of the code of business conduct and ethics to directors and officers. Although we will require board approval of any such
waiver, we may choose not to disclose the waiver in the manner set forth in the Nasdaq rules, as permitted by the foreign private
issuer exemption. |
Furthermore,
Nasdaq Rule 5615(a)(3) provides that a foreign private issuer, such as us, may rely on our home country corporate governance practices
in lieu of certain of the rules in the Nasdaq Rule 5600 Series and Rule 5250(d), provided that we nevertheless comply with Nasdaq’s
Notification of Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640) and that we have an audit committee
that satisfies Rule 5605(c)(3), consisting of committee members that meet the independence requirements of Rule 5605(c)(2)(A)(ii). If
we rely on our home country corporate governance practices in lieu of certain of the rules of Nasdaq, our shareholders may not have the
same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq. If
we choose to do so, we may utilize these exemptions for as long as we continue to qualify as a foreign private issuer.
Corporate
Information
Our
principal executive office is located at Office 1401, Level 14, 197 St Georges Tce, Perth, WA 6000, Australia. Our telephone number is
(+61) 08 6141 3263. Our registered office in the Cayman Islands is located at the office of Ogier Global (Cayman) Limited, 89 Nexus Way,
Camana Bay, Grand Cayman, KY1-9009, Cayman Islands.
Our
agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th
Floor New York, NY 10168. Information contained on, or that can be accessed through, our website is not a part of, and shall not be incorporated
by reference into, this prospectus.
Impact
of COVID-19
Since
late December 2019, the outbreak of COVID-19 spread rapidly throughout China and later to the rest of the world. On January 30, 2020,
the International Health Regulations Emergency Committee of the World Health Organization declared the outbreak a “Public Health
Emergency of International Concern” (“PHEIC”), and later on March 11, 2020, a global pandemic. The COVID-19 outbreak
has led governments across the globe to impose a series of measures intended to contain its spread, including border closures, travel
bans, quarantine measures, social distancing, and restrictions on business operations and large gatherings. From 2020 to the middle of
2021, COVID-19 vaccination programs had been greatly promoted around the globe; however, several types of COVID-19 variants
emerged in different parts of the world.
Supply
chain disruptions have become a major challenge for the global economy since the start of the COVID-19 pandemic. These shortages and
supply-chain disruptions are significant and widespread. Lockdowns in several countries across the world, labor shortages, robust demand
for tradable goods, disruptions to logistics networks, and capacity constraints have resulted in increases in freight costs and delivery
times.
Furthermore,
our business may be adversely affected if concerns relating to COVID-19 continue to restrict travel, or result in the Company’s
personnel, vendors, and services providers being unavailable to pursue their business objectives free of COVID-19 related restrictions.
The extent to which COVID-19 impacts our business in the future will depend on future developments, which are highly uncertain and cannot
be predicted, including new information that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat
its impact, among others. If the disruptions posed by COVID-19 or other matters of global concerns continue for an extended period of
time, our ability to pursue our business objectives may be materially adversely affected. In addition, our ability to raise equity and
debt financing, which may be adversely impacted by COVID-19 and other events, including as a result of increased market volatility, decreased
market liquidity and third-party financing became unavailable on terms acceptable to us or at all.
Any
future impact on our results of operations will depend on, to a large extent, future developments and new information that may emerge
regarding the duration and severity of the COVID-19 pandemic and the actions taken by government authorities and other entities to contain
the spread or treat its impact, almost all of which are beyond our control. Given the general slowdown in economic conditions globally
and volatility in the capital markets, as well as the general negative impact of the COVID-19 outbreak on the logistics and freight forwarding
industry, we cannot assure you that we will be able to maintain the growth rate we have experienced or projected. We will continue to
closely monitor the situation throughout 2024 and beyond. For details regarding risks associated with COVID-19, refer to “Item
3. Key Information – D. Risk Factors — Risks Related to Our Business and Industry — A sustained outbreak of the COVID-19
pandemic could have a material adverse impact on our business, operating results, and financial condition” set forth in our
most recent Annual Report on Form 20-F for the fiscal year ended September 30, 2023 on file with the SEC, which is incorporated by reference
into this prospectus.
The
Offering
Securities
being offered by the Investor: |
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The ELOC Shares that we may elect, in our sole discretion to issue and sell to the Investor, from time to time from and after the date of the ELOC Purchase Agreement in a maximum offering amount of up to $20 million.
306,123
Initial
Commitment Shares that have been issued
to the Investor as consideration for its commitment to purchase ELOC Shares under the ELOC
Purchase Agreement. We did not receive any cash proceeds from the issuance of these Initial
Commitment Shares.
Up to 306,123 True-Up Shares that may
be issued to the Investor if the product of (x) the closing price of the Ordinary Shares on the trading day following the Lock-Up Termination
Date and (y) the number of Initial Commitment Shares is less than $300,000, and then only to the extent to cause the value of the Commitment
Shares to be $300,000 on such date. We will not receive any cash proceeds for any True-Up Shares issued as
any True-Up Share to be issued will form part of the consideration for the commitment by the Investor to purchase the ELOC Shares under
the ELOC Purchase Agreement.
See “The Equity Line of Credit.” |
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Use
of proceeds: |
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We
will not receive any proceeds from any sale of the ELOC Shares by the Investor. However, we may receive up to $20 million in aggregate
gross proceeds from the Investor under the ELOC Purchase Agreement in connection with sales of our ELOC Shares to the Investor pursuant
to the ELOC Purchase Agreement after the date of this prospectus. We intend to use any proceeds from the Facility for working capital
and general corporate purposes. |
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For
more information on the use of proceeds, see “Use of Proceeds” on page 23. |
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Lock-up: |
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Neither
the Investor, nor any affiliate of the Investor acting on its behalf or pursuant to any understanding with it, will in any manner
whatsoever, directly or indirectly, during the period commencing on the date of the ELOC Purchase Agreement and ending on (x)
earlier of the date of the delivery of the first written notice of the Company requiring the Investor to purchase the ELOC Shares,
and (y) the date that is six months from the date of the ELOC Purchase Agreement, (i) offer, pledge, announce the intention
to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, make any short sale, or otherwise transfer or dispose of, any Ordinary Shares; (ii) enter into any
transaction that is designed to, or might reasonably be expected to, result in the transfer to another Person, in whole or in part,
any of the economic consequences of ownership of any Ordinary Shares (each, a “Disposition”); or (iii) publicly disclose
the intention to make any Disposition or engage in any short sale, without the prior written consent of the Company. |
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Listing: |
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Our
Ordinary Shares are listed on Nasdaq under the symbol “GVH.” |
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Risk
factors: |
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Investing
in our Ordinary Shares is highly speculative and involves a high degree of risk. As an investor you should be able to bear a complete
loss of your investment. You should carefully consider the information set forth in the “Risk Factors” section
beginning on page 16. |
RISK
FACTORS
An
investment in our securities involves significant risk. Before making an investment in our securities, you should carefully consider
the risk factors set forth in our most recent Annual Report on Form 20-F for the fiscal year ended September 30, 2023 on file with the
SEC, which is incorporated by reference into this prospectus, as well as the following risk factors, which augment the risk factors set
forth in our most recent Annual Report. Before making an investment decision, you should carefully consider these risks as well as other
information we include or incorporate by reference in this prospectus. The risks and uncertainties not presently known to us or that
we currently deem immaterial may also materially harm our business, operating results and financial condition and could result in a complete
loss of your investment.
Risks
Related to the Equity Line of Credit
The sale of a substantial amount
of ELOC Shares in the public market could adversely affect the prevailing market price of our Ordinary Shares.
We are
registering for resale an aggregate of up to $20 million of ELOC Shares, together with 306,123 Initial Commitment Shares and up to 306,123 True-Up Shares. Sales of substantial amounts of our Ordinary Shares in the public market, or the perception that such sales might
occur, could adversely affect the market price of our Ordinary Shares. We cannot predict if and when the Investor may sell such
shares in the public markets. Furthermore, in the future, we may issue additional Ordinary Shares or other equity or debt securities
convertible into Ordinary Shares. Any such issuance could result in substantial dilution to our existing shareholders and could
cause our share price to decline.
It
is not possible to predict the actual number of ELOC Shares, if any, we will sell under the ELOC Purchase Agreement to the Investor,
or the actual gross proceeds resulting from those sales.
On
March 15, 2024, we entered into the ELOC Purchase Agreement with the Investor, pursuant to which the Investor has committed to purchase
up to $20 million of our ELOC Shares, subject to certain limitations and conditions set forth in the ELOC Purchase Agreement. The ELOC
Shares that may be issued under the ELOC Purchase Agreement may be sold by us to the Investor at our discretion from time to time until
the earlier of (i) the date on which the Investor shall have purchased ELOC Shares pursuant to the ELOC Purchase Agreement equal to the
maximum amount of the Facility, (ii) March 15, 2027, (iii) written notice of termination by the Company to the Investor (which
shall not occur at any time that the Investor holds any of the ELOC Shares), or (iv) written notice of termination by the Investor to
the Company upon certain events occurring.
We
generally have the right to control the timing and amount of any sales of the ELOC Shares to the Investor under the ELOC Purchase Agreement.
Sales of the ELOC Shares, if any, to the Investor under the ELOC Purchase Agreement will depend upon market conditions and other factors
to be determined by us. We may ultimately decide to sell to the Investor all, some or none of the ELOC Shares that may be available for
us to sell to the Investor pursuant to the ELOC Purchase Agreement.
Because
the purchase price per Ordinary Share to be paid by the Investor for the ELOC Shares that we may elect to sell to the Investor
under the ELOC Purchase Agreement, if any, will fluctuate based on the market prices of our Ordinary Shares at the time we elect to sell
the ELOC Shares to the Investor pursuant to the ELOC Purchase Agreement, if any, it is not possible for us to predict, as of the date
of this prospectus and prior to any such sales, the number of ELOC Shares that we will sell to the Investor under the ELOC Purchase Agreement,
the purchase price per share that the Investor will pay for ELOC Shares purchased from us under the ELOC Purchase Agreement, or the aggregate
gross proceeds that we will receive from those purchases by the Investor under the ELOC Purchase Agreement.
The
ELOC Purchase Agreement
provides that we may, in our discretion, from time to time after the date of this prospectus and during the term of the ELOC Purchase
Agreement, direct the Investor to purchase the ELOC Shares from us in one or more purchases under the ELOC Purchase Agreement, for a
maximum aggregate gross purchase price of up to $20 million of the ELOC Shares. An maximum aggregate offering amount of $20 million
in ELOC Shares are being registered for resale under the registration statement that includes this prospectus, which would represent
approximately 23,389,077 Ordinary Shares based on the closing price of our shares on Nasdaq on June 27, 2024 of $0.8551
per share, in addition to the Commitment Shares. However, because the market prices of the ELOC Shares may fluctuate from
time to time after the date of this prospectus, the actual purchase prices to be paid by the Investor for the ELOC Shares that we direct
it to purchase under the ELOC Purchase Agreement, if any, also may fluctuate significantly based on the market price of the ELOC Shares.
Any
issuance and sale by us under the ELOC Purchase Agreement of a substantial amount of ELOC Shares could cause substantial dilution to
our shareholders. The number of ELOC Shares ultimately offered for sale by the Investor is dependent upon the number of ELOC Shares,
if any, we ultimately elect to sell to the Investor under the ELOC Purchase Agreement. However, even if we elect to sell ELOC Shares
to the Investor pursuant to the ELOC Purchase Agreement, the Investor may resell all, some or none of such shares at any time or from
time to time in its sole discretion and at different prices.
Investors
who buy ELOC Shares from the Investor at different times will likely pay different prices.
Pursuant
to the ELOC Purchase Agreement, we will have discretion, to vary the timing, price and number of shares sold to the Investor. If and
when we elect to sell the ELOC Shares to the Investor pursuant to the ELOC Purchase Agreement, after the Investor has acquired such ELOC
Shares, the Investor may resell all, some or none of such shares at any time or from time to time in its sole discretion and at different
prices. As a result, investors who purchase shares from the Investor in this offering at different times will likely pay different prices
for those shares, and so may experience different levels of dilution and in some cases substantial dilution and different outcomes in
their investment results. Investors may experience a decline in the value of the shares they purchase from the Investor in this offering
as a result of future sales made by us to Investor at prices lower than the prices such investors paid for their shares in this offering.
In addition, if we sell a substantial number of shares to the Investor under the ELOC Purchase Agreement, or if investors expect that
we will do so, the actual sales of shares or the mere existence of our arrangement with the Investor may make it more difficult for us
to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such sales.
We
may use proceeds from sales of the ELOC Shares made pursuant to the ELOC Purchase Agreement in ways with which you may not agree or
in ways which may not yield a significant return.
We
will have broad discretion over the use of proceeds from sales of the ELOC Shares made pursuant to the ELOC Purchase Agreement, and you
will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. However,
we have not determined the specific allocation of any net proceeds among these potential uses, and the ultimate use of the net proceeds
may vary from the currently intended uses. The net proceeds may be used for corporate purposes that do not enhance our operating results
or the value of our Ordinary Shares.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements that involve substantial risks and uncertainties. In some cases, you can identify forward-looking
statements by the words “may,” “might,” “will,” “could,” “would,” “should,”
“expect,” “intend,” “plan,” “goal,” “objective,” “anticipate,”
“believe,” “estimate,” “predict,” “potential,” “continue,” and “ongoing,”
or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve
known and unknown risks, uncertainties, and other important factors that may cause our actual results, levels of activity, performance,
or achievements to be materially different from the information expressed or implied by these forward-looking statements. The forward-looking
statements and opinions contained in this prospectus are based upon information available to us as of the date of this prospectus and,
while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our
statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available
relevant information. Forward-looking statements include statements about:
|
● |
the
expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of the government, consumers,
the Company, and our operating subsidiaries on our business, financial condition and results of operations; |
|
● |
timing
of the development of future business; |
|
● |
capabilities
of our business operations; |
|
● |
expected
future economic performance; |
|
● |
competition
in our market; |
|
● |
continued
market acceptance of our services and products distributed by us; |
|
● |
changes
in the laws that affect our operations; |
|
● |
inflation
and fluctuations in foreign currency exchange rates; |
|
● |
our
ability to obtain and maintain all necessary government certifications, approvals, and/or licenses to conduct our business; |
|
● |
continued
development of a public trading market for our securities; |
|
● |
the
cost of complying with current and future governmental regulations and the impact of any changes in the regulations on our operations; |
|
● |
managing
our growth effectively; |
|
● |
projections
of revenue, earnings, capital structure, and other financial items; |
|
● |
fluctuations
in operating results; |
|
● |
dependence
on our senior management and key employees; and |
|
● |
other
factors set forth under “Risk Factors.” |
You
should refer to the section titled “Risk Factors” for a discussion of important factors that may cause our actual results
to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure
you that the forward-looking statements in this prospectus will prove to be accurate. Furthermore, if our forward-looking statements
prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements,
you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives
and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether
as a result of new information, future events, or otherwise, except as required by law.
You
should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement,
of which this prospectus forms a part, completely and with the understanding that our actual future results may be materially different
from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
THE
EQUITY LINE OF CREDIT
On
March 15, 2024, we entered into the ELOC Purchase Agreement with the Investor establishing the Facility. Pursuant to and subject to the
conditions set forth in the ELOC Purchase Agreement, beginning on March 15, 2024 (the “Commencement Date”), we have the right
from time to time at our option to direct the Investor to purchase the ELOC Shares up to a maximum aggregate purchase price of $20 million
(the “Maximum Commitment Amount”), subject to certain limitations and conditions set forth in the ELOC Purchase Agreement.
Sales of the ELOC Shares to the Investor under the ELOC Purchase Agreement, and the timing of any sales, will be determined by us from
time to time in our sole discretion, subject to the terms of the ELOC Purchase Agreement, and will depend on a variety of factors, including, among other things, market conditions, the trading
price of our Ordinary Shares and determinations by us regarding the use of proceeds from any sale of such ELOC Shares. The net proceeds
from any sales under the Facility will depend on the frequency with, and prices at, which the ELOC Shares are sold to the Investor. To
the extent we sell shares under the ELOC Purchase Agreement, we currently plan to use any proceeds therefrom for working capital and
general corporate purposes.
On
June 4, 2024, we issued the Initial Commitment Shares to the Investor as consideration for its entry into the ELOC Purchase
Agreement. Other than that, Investor paid no cash consideration for the Initial Commitment Shares. Accordingly, any proceeds
received by the Investor upon its sale of the Initial Commitment Shares would be profit. As of the date of this prospectus, no other
Ordinary Shares have been issued to the Investor.
In
accordance with our obligations under the ELOC Purchase Agreement and the ELOC Registration Rights Agreement, we have filed the
registration statement of which this prospectus forms a part in order to register the resale by the Investor of (i) up to $20
million of ELOC Shares that we may elect, in our sole discretion, to issue and sell to the Investor, from time to time from and
after the Commencement Date under the Purchase Agreement, (ii) 306,123 Initial Commitment Shares and (iii) up to 306,123 True-Up Shares to be issued if the product of
(x) the closing price of the Ordinary Shares on the trading day following the Lock-Up Termination Date and (y) the number of Initial Commitment
Shares is less than $300,000, and then only to the extent to cause the value of the Commitment Shares to be $300,000 on such date. Unless earlier terminated, the Purchase Agreement will remain in effect
until the earlier of: (i) March 15, 2027, i.e., the expiry of the 36-month period commencing on the date of the ELOC Purchase
Agreement, or (ii) the date to which the Investor has purchased the Maximum Commitment Amount (the “Commitment
Period”).
Under
applicable Nasdaq rules and the terms of the ELOC Purchase Agreement, the Investor shall not purchase any ELOC Shares under the
ELOC Purchase Agreement if such shares, when aggregated with all other Ordinary Shares then beneficially owned by the Investor and its
affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule13d-3 promulgated thereunder), would result in the Investor
beneficially owning Ordinary Shares in excess of the lesser of (i) 4.99% of the number of Ordinary Shares outstanding immediately after giving effect to the issuance
of Ordinary Shares issuable pursuant to a Put Notice (as defined below), and (ii) 19.99% of the Ordinary Shares outstanding as of the
date the applicable Put Notice is submitted, excluding Ordinary Shares held by our “affiliates” (as such term is defined in
Rule 405 of the Securities Act).
The
ELOC Purchase Agreement and the ELOC Registration Rights Agreement contain customary registration rights, representations,
warranties, conditions and indemnification obligations by each party. The representations, warranties and covenants contained in the
ELOC Purchase Agreement were made only for purposes of the ELOC Purchase Agreement and as of specific dates, were solely for the
benefit of the parties to such agreements and are subject to certain important limitations.
Purchase
of ELOC Shares under the ELOC Purchase Agreement
From
and after the Commencement Date, we will have the right, but not the obligation, from time to time at our sole discretion, until the
earlier of: (i) March 15, 2027, unless terminated earlier pursuant to the terms of the ELOC Purchase Agreement,
or (ii) the date to which the Investor has purchased the Maximum Commitment Amount, to direct the Investor to make a purchase of the
ELOC Shares by delivering written notice to the Investor (such notice, a “Put Notice”) on any trading day (the “Put
Date”) to purchase the ELOC Shares. The maximum number of ELOC Shares that we may require the Investor to purchase at each Put
Notice shall be:
| ● | the
lesser of (i) one hundred percent of the Average Daily Trading Volume over the five trading
days preceding the applicable Put Date, (ii) thirty percent of the Average Daily Trading
Volume (which shall mean the average trading volume of our Ordinary Shares on the applicable
trading days) on the applicable Put Date, or (iii) the quotient (rounded up or down to the
nearest whole number) obtained by dividing (A) $500,000 by (B) the last closing price on
the applicable Put Date (the “Option 1 Maximum Put Amount”); or |
| ● | the
lesser of (i) one hundred twenty-five percent of the Average Daily Trading Volume over the
five (5) trading days preceding the applicable Put Date, (ii) forty percent of the Average
Daily Trading Volume on the applicable Put Date, and (iii) the quotient (rounded up or down
to the nearest whole number) obtained by dividing (A) $750,000 by (B) the last closing price
on the applicable Put Date (the “Option 2 Maximum Put Amount”), |
at
our absolute discretion, provided that the number of ELOC Shares to be purchased by the Investor shall not exceed the lesser of (i)
4.99% of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares issuable pursuant
to a Put Notice, and (ii) 19.99% of the Ordinary Shares outstanding as of the date the applicable Put Notice is submitted, excluding
Ordinary Shares held by our “affiliates” (as such term is defined in Rule 405 of the Securities Act).
The
per share purchase price for the ELOC Shares that we elect to sell to the Investor in a Put Notice pursuant to the ELOC Purchase Agreement,
if any, will be equal to either (i) 97% of the lowest daily VWAP of our Ordinary Shares during the period of three consecutive trading
days immediately following the applicable Put Date (the “Option 1 Valuation Period”) if we require the Investor to purchase
such ELOC Shares at Option 1 Maximum Put Amount, or (ii) 95% of the lowest daily VWAP of our Ordinary Shares during the period of five
consecutive trading days immediately following the applicable Put Date (the “Option 2 Valuation Period”) if we require the
Investor to purchase such ELOC Shares at Option 2 Maximum Put Amount, provided that such purchase price shall not fall below the par value of the Ordinary Shares. “VWAP”, for such purposes, shall mean, as of any trading
day, the dollar volume-weighted average price for our Ordinary Shares on Nasdaq during the period beginning at 9:30:01 a.m., New York
City time, or such other time publicly announced by Nasdaq as the official open (or commencement) of trading on Nasdaq on such trading
day, and ending at 4:00 p.m., New York City time, or such other time publicly announced by Nasdaq as the official close of trading on
Nasdaq on such trading day, as reported by Bloomberg through its “AQR” function or, if no dollar volume-weighted average
price is reported for our Ordinary Shares by Bloomberg through its “AQR” function for such hours, the average of the highest
closing bid price and the lowest closing ask price of any of the market makers for such security on such trading day as reported by OTC
Markets Group Inc. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization
or other similar transaction during such period.
We
shall deliver the ELOC Shares that we sell to the Investor under each Put Notice no later than 12:00 p.m. (New York City Time) on
the trading day following the delivery of the applicable Put Notice, and the Investor shall pay the purchase price for the ELOC
Shares no later than the second trading day following the end of the applicable Option 1 Valuation Period or Option 2 Valuation
Period.
Conditions
precedent to purchase the ELOC Shares
The
Investor’s obligation to purchase the ELOC Shares is subject to the satisfaction of the conditions precedent thereto set forth
in the ELOC Purchase Agreement, which conditions include, among others, the following :
| ● | the
registration statement of which this prospectus forms part having been and remains effective
for the resale by the Investor of the ELOC Shares and not subject to any withdrawal or suspension
of its effectiveness; |
| ● | the
accuracy in all material respects of the representations and warranties of the Company included
in the ELOC Purchase Agreement; |
| ● | we
shall have performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the ELOC Purchase Agreement to be performed, satisfied
or complied with by us; |
| ● | no
statute, rule, regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or adopted by any court or governmental authority of competent
jurisdiction that prohibits or directly and materially adversely affects any of the transactions
contemplated by the Equity Line of Credit, and no proceeding shall have been commenced that
may have the effect of prohibiting or materially adversely affecting any of the transactions
contemplated by the Equity Line of Credit; and |
| ● | the
receipt by the Investor of customary legal opinions as required under the ELOC Purchase Agreement. |
Termination
of the ELOC Purchase Agreement
The
ELOC Purchase Agreement will automatically terminate on the earlier of (i) the end of the Commitment Period; (ii) the date that the Company
sells and the Investor purchases the Maximum Commitment Amount; or (iii) the date that we are subject of a bankruptcy proceedings or
a custodian is appointed for us or for all or substantially all of our property or we make a general assignment for the benefit of our
creditors.
We
also have the right to terminate the ELOC Purchase Agreement at any time after the effectiveness of the registration statement of which
this prospectus forms part, for any reason or for no reason, by delivering written notice to the Investor without any liability, provided
that the Investor does not hold any ELOC Shares.
No
Short-Selling or Hedging by the Investor
The
Investor has agreed that neither it, nor any of its affiliates, will in any manner whatsoever, directly or indirectly, (i) participate
in or execute any short sales (as defined in Rule 200 of Regulation SHO under the Exchange Act) during the period from the date of the
ELOC Purchase Agreement to the end of the Commitment Period or (ii) any hedging transaction that would create a net short position with
respect to our Ordinary Shares.
Prohibition
on Similar Transactions
Subject
to specified exceptions included in the ELOC Purchase Agreement, during the term of the ELOC Purchase Agreement, we will not effect or
enter into an agreement to effect an “equity line of credit,” “at-the-market offering,” or any similar transaction
without the Investor’s consent.
Effect
of Sales of Our Ordinary Shares under the ELOC Purchase Agreement on Our Shareholders
The
Ordinary Shares being registered for resale in this offering may be issued and sold by us to the Investor from time to time at our
discretion over the Commitment Period. The resale by the Investor of a significant amount of shares at any given time, or the
perception that these sales may occur, along with other issuances and resales of other Ordinary Shares, could cause the market price
of our Ordinary Shares to decline and to be highly volatile. If all $20 million of ELOC Shares offered for resale
by the Investor under this prospectus, which would represent approximately 23,389,077 Ordinary Shares based on the closing price of $0.8551 per share
as of June 27, 2024, together with (i) the 306,123 Initial Commitment Shares and (ii) 306,123 True-Up Shares were issued and outstanding as of the date of this prospectus, such Ordinary Shares would
represent approximately 62.14% of the total number of our Ordinary Shares outstanding after giving effect to such issuance, assuming the 306,123 True-Up Shares were issued. The
number of Ordinary Shares ultimately offered for sale by the Investor for resale under this prospectus is dependent upon the number
of Ordinary Shares, if any, we ultimately sell to the Investor under the ELOC Purchase Agreement. We may ultimately decide to sell
to the Investor all, some or none of the ELOC Shares that may be available for us to sell to the Investor pursuant to the ELOC
Purchase Agreement.
If
and when we elect to sell ELOC Shares to the Investor pursuant to the ELOC Purchase Agreement, after the Investor has acquired such shares,
the Investor may resell all, some or none of such ELOC Shares at any time or from time to time in its discretion and at different prices.
As a result, investors who purchase ELOC Shares from the Investor in this offering at different times will likely pay different prices
for those ELOC Shares, and so may experience different levels of dilution and in some cases substantial dilution and different outcomes
in their investment results. See “Risk Factors — Risks Related to the Equity Line of Credit — Investors who buy
ELOC Shares from the Investor at different times will likely pay different prices.”
Investors
may experience a decline in the value of the ELOC Shares they purchase from the Investor in this offering as a result of future sales
made by us to the Investor at prices lower than the prices such investors paid for their ELOC Shares in this offering.
In
addition, if we sell a substantial number of ELOC Shares to the Investor under the ELOC Purchase Agreement, or if investors expect that
we will do so, the actual sales of Ordinary Shares or the mere existence of our arrangement with the Investor may make it more difficult
for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such
sales. Further, while the issuance of ELOC Shares to the Investor pursuant to the ELOC Purchase Agreement will not affect the rights
or privileges of our existing shareholders, the economic and voting interests of each of our existing shareholders will be diluted as
a result of such issuance.
The
per share purchase price of the Ordinary Shares that we elect to sell to the Investor in a Put Notice pursuant to the ELOC Purchase Agreement,
if any, will be equal to 97% of the lowest daily VWAP of our Ordinary Shares during the applicable Option 1 Valuation Period, or 95%
of the lowest daily VWAP of our Ordinary Shares during the applicable Option 2 Valuation Period. Accordingly, the purchase price per
share that the Investor will pay for the ELOC Shares purchased from us under the ELOC Purchase Agreement, if any, will fluctuate based
on the market price of our Ordinary Shares. As of the date of this prospectus, it is not possible for us to predict the number of ELOC
Shares that we will sell to the Investor under the ELOC Purchase Agreement, the actual purchase price per share to be paid by the Investor
for those ELOC Shares, or the actual gross proceeds to be raised by us from those sales, if any.
USE
OF PROCEEDS
Any
sales of ELOC Shares by the Investor pursuant to this prospectus will be solely for the Investor’s account. We will not
receive any proceeds from any such sales. However, we may receive up to $20 million in aggregate gross proceeds from the Investor under
the ELOC Purchase Agreement in connection with sales of our ELOC Shares to the Investor pursuant to the ELOC Purchase Agreement after
the date of this prospectus. However, the actual proceeds may be less than this amount depending on the number of the ELOC Shares
sold and the price at which the ELOC Shares are sold by us under the ELOC Purchase Agreement. The use of the Facility under the
ELOC Purchase Agreement is subject to certain conditions, including the effectiveness of the registration statement of which this prospectus
forms a part. Therefore, funds from the $20 million gross purchase price will not be immediately available, if at all, to us, and there
can be no assurances that the Facility will be available to us at all times during its term or that such purchase price will ever become
available. See “Plan of Distribution” and “The Equity Line of Credit” elsewhere in this prospectus
for more information.
We
intend to use any proceeds from the Facility for working capital and general corporate purposes. We will have broad discretion in the
way we use these proceeds. See “Risk Factors — Risk Related to the Equity Line of Credit — We
may use proceeds from sales of our Ordinary Shares made pursuant to the ELOC Purchase Agreement in ways with which you may not agree
or in ways which may not yield a significant return.”
The
Investor will pay or assume any discounts, commissions or concessions received by them except as set forth
in the ELOC Purchase Agreement. We will bear all other costs, fees
and expenses incurred in effecting the registration of the ELOC Shares and the Commitment Shares covered by this prospectus, including,
without limitation, all registration and filing fees and fees and expenses of counsel and independent registered public accountants.
We
cannot currently determine the price or prices at which the ELOC Shares may be sold by the Investor under this prospectus.
DIVIDEND
POLICY
We
currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business, and we do
not anticipate declaring or paying any dividends in the foreseeable future. Any future determination related to our dividend policy will
be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements,
contractual requirements, business prospects, other factors the board of directors deems relevant, and subject to the restrictions contained
in any future financing instruments.
During
the years ended September 30, 2022 and 2023 and the six months ended March 31, 2024, Globavend Holdings and Globavend BVI have
not distributed any cash dividends or made any other cash distributions. During the six months ended March 31, 2024, Globavend HK
has not distributed any cash dividends or made any other cash distributions. During the year ended September 30, 2023, Globavend
HK declared cash dividends in the amount of US$1,474,359 (equivalent to HK$11,500,000) to our Controlling Shareholder. During the
year ended September 30, 2022, Globavend HK declared dividends in the amount of US$1,597,909 (equivalent to HK$12,463,692) to our
Controlling Shareholder, of which the amount of US$1,244,502 (equivalent to HK$9,707,117) has been distributed as cash dividends and
the remaining amount was offset with the amount due to Mr. Yau.
The
declaration, amount, and payment of any future dividends will be at the sole discretion of our board of directors, subject to compliance
with applicable Cayman Islands laws regarding solvency. Our board of directors will take into account general economic and business conditions;
our financial condition and results of operations; our available cash and current and anticipated cash needs; capital requirements; contractual,
legal, tax, and regulatory restrictions; and other implications on the payment of dividends by us to our shareholders or by our subsidiaries
to us, and such other factors as our board of directors may deem relevant.
Subject
to the Companies Act and our Memorandum and Articles of Association, the holders of our Ordinary Shares are entitled to
such dividends as may be declared by our board of directors. Subject to a solvency test, as prescribed in the Companies Act, and the
provisions, if any, of our Memorandum and Articles of Association, a company may pay dividends and distributions out of its share premium
account. In addition, dividends may be paid out of profits available on company level.
We
are a holding company incorporated in the Cayman Islands with no operating revenue or profit of our own. We rely on dividends paid to
us by our subsidiaries for our cash requirements, including funds to pay any dividends and other cash distributions to our shareholders,
service any debt we may incur, and pay our operating expenses. Our ability to pay dividends to our shareholders will depend on, among
other things, the availability of dividends from our subsidiaries. According to the BVI Business Companies Act (as amended), a BVI company
may make dividends distribution to the extent that immediately after the distribution, the value of the company’s assets exceeds
its liabilities and that such company is able to pay its debts as they fall due. According to the Companies Ordinance of Hong Kong, a
Hong Kong company may only make a distribution out of profits available for distribution. Under the current practice of the Inland Revenue
Department of Hong Kong, no tax is payable in Hong Kong with respect to dividends paid by us.
Cash
dividends, if any, on our Ordinary Shares will be paid in U.S. dollars.
EXCHANGE
RATE INFORMATION
Globavend
Holdings is a holding company with operations conducted in Hong Kong through Globavend HK, our sole operating subsidiary as of the date
of this prospectus, using Hong Kong dollars. Globavend HK’s reporting currency is Hong Kong dollars. The Hong Kong dollar is pegged
to the U.S. dollar at a range of HK$7.75 to HK$7.85 to US$1. Unless otherwise noted, all translations from Hong Kong dollars to U.S.
dollars and from U.S. dollars to Hong Kong dollars in this prospectus were calculated at the noon buying rate of US$1 = HK$7.8, representing
the noon buying rate in The City of New York for cable transfers of HK$ as certified for customs purposes by the Federal Reserve Bank
of New York on the last trading day of March 31, 2024. No representation is made that the HK$ amount represents or could have
been, or could be, converted, realized or settled into US$ at that rate, or at any other rate.
CORPORATE
HISTORY AND STRUCTURE
Corporate
History and Structure
The
Company is an exempted company with limited liability incorporated under the laws of the Cayman Islands that wholly-owns our subsidiary,
Globavend Associates Limited (“Globavend BVI”), a company incorporated under the laws of the BVI, that in turn wholly owns
Globavend HK, our subsidiary in Hong Kong.
On
November 10, 2023, the Company completed its IPO and listed its Ordinary Shares on the Nasdaq Capital Market under the symbol “GVH”.
In connection with the IPO, the Company received aggregate gross proceeds of $6,000,000, prior to deducting underwriting discounts and
other offering expenses and received proceeds of $5,379,500 after deducting underwriting discounts and other offering expenses of $620,500. The proceeds of $5,379,500 were recorded in additional paid in capital with
total offering cost of $2,415,444 against additional paid in capital.
For more detail of our corporate history, please refer to “Item
4. Information on the Company – A. History and Development of the Company” set forth in our most recent Annual Report
on Form 20-F for the fiscal year ended September 30, 2023 on file with the SEC, which is incorporated by reference into this prospectus.
Our
principal office is located at Office 1401, Level 14, 197 St Georges Tce, Perth, WA 6000, Australia. Our telephone number is (+61) 08
6141 3263. Our registered office in the Cayman Islands is located at the office of Ogier Global (Cayman) Limited, 89 Nexus Way, Camana
Bay, Grand Cayman, KY1-9009, Cayman Islands.
Our
agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th
Floor New York, NY 10168. Information contained on, or that can be accessed through, our website is not a part of, and shall not be incorporated
by reference into, this prospectus.
The
charts below illustrate our corporate structure and subsidiaries as of the date of this prospectus:
Name |
|
Background |
|
Ownership |
Globavend
BVI |
|
-
A BVI company
-
Incorporated on May 24, 2023
-
Issued share capital of US$2.00
-
Intermediate holding company |
|
100%
owned by Globavend Holdings |
|
|
|
|
|
Globavend
HK |
|
-
A Hong Kong company
-
Incorporated on June 27, 2016
-
Issued share capital of HK$1,000,000
-
Engaged in the provision of cross-border logistics and air freight forwarding services |
|
100%
owned by Globavend BVI |
We
are registering for resale by the Investor the ELOC Shares in a maximum offering amount of up to $20,000,000.00, together with
(i) 306,123 Ordinary Shares that have been issued by us to the Investor pursuant to the ELOC Purchase Agreement, being the Initial
Commitment Shares for the Facility, and (ii) up to 306,123 Ordinary Shares that may be issued by us to the Investor as applicable,
being the True-Up Shares for the Facility, pursuant to the ELOC Purchase Agreement.
We
are a “controlled company” as defined under the Nasdaq Stock Market Rules because, as of the date of this prospectus,
our Controlling Shareholder owns 11,444,790 of our total issued and outstanding Shares, representing approximately 76.65% of the
total voting power. Therefore, we may elect not to comply with certain corporate governance requirements of Nasdaq. Currently, we do
not plan to utilize the “controlled company” exemptions with respect to our corporate governance practice. See “Item
3. Key Information – D. Risk Factors — Risks Related to Our Ordinary Shares — As a “controlled company”
under the rules of the Nasdaq Capital Market, we may choose to exempt our Company from certain corporate governance requirements that
could have an adverse effect on our public shareholders” set forth in our most recent Annual Report on Form 20-F for the fiscal
year ended September 30, 2023 on file with the SEC, which is incorporated by reference into this prospectus.
At
each general meeting, each shareholder who is present in person or by proxy (or, in the case of a shareholder being a corporation, by
its duly authorized representative) will have one vote for each Ordinary Share that such shareholder holds. There are no prohibitions
to cumulative voting under the laws of the Cayman Islands, but our Memorandum and Articles of Association do not provide for cumulative
voting.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The
following management discussion and analysis of financial condition and results of operations contains forward-looking statements which
involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements
as a result of certain factors, including those set forth under “Risk Factors”, or those set forth under “Item 3.
Key Information – D. Risk Factors” in our most recent Annual Report on Form 20-F for the fiscal year ended September 30,
2023 on file with the SEC, which is incorporated by reference into this prospectus, and elsewhere in this prospectus. We assume no
obligation to update forward-looking statements or the risk factors. You should read the following discussion in conjunction with our
consolidated financial statements and related notes included elsewhere in this prospectus.
OVERVIEW
We
are a holding company incorporated in the Cayman Islands with operations conducted by our Hong Kong subsidiary Globavend HK.
We
are an established emerging e-commerce logistics provider providing end-to-end supply chain solutions in Hong Kong, Australia
and New Zealand. We provide integrated cross-border logistics services between Hong Kong, Australia and New Zealand, where we
provide customers with a one-stop solution, from parcel consolidation to air freight forwarding, customs clearance, on-carriage
parcel transportation and delivery. Our customers are primarily enterprise customers, being e-commerce merchants, or operators of
e-commerce platforms, in providing business-to-consumer (B2C) transactions.
MAJOR
FACTORS AFFECTING OUR FINANCIAL RESULTS
The
directors believe that the following major factors may affect our revenues and results of operations:
Economic
conditions in Hong Kong
During
the years ended September 30, 2022 and 2023 and the six months ended March 31, 2023 and 2024, a large portion of our revenues
was generated in Hong Kong. Accordingly, if Hong Kong experiences any adverse economic, political or regulatory conditions due to
events beyond our control, such as local economic downturn, natural disasters, contagious disease outbreaks, terrorist attacks, or
if the government adopts regulations that place restrictions or burdens on us or on our industry in general, our business, financial
condition, results of operations and prospects may be materially and adversely affected.
Fluctuations
in foreign exchange rates
We
are a global provider of integrated cross-border logistics services and air freight forwarding services and our functional currency is
the Hong Kong dollars. Most of our transactions during the periods presented in this prospectus are denominated in Hong Kong dollars,
Australian dollars and New Zealand dollars. Historically, our principal exposure to foreign currency fluctuations is mainly with respect
to our expenses incurred denominated in Australian dollars and New Zealand dollars. For the years ended September 30, 2022 and 2023 and
the six months ended March 31, 2023 and 2024, we incurred approximately 47.7%, 54.3%, 56.6% and 58.1% of our
cost of revenue, respectively, denominated in foreign currencies for customs clearance fees and local courier expenses. We do not use
currency exchange contracts to reduce the risk of adverse foreign currency movements, but we believe that our exposure from foreign currency
fluctuations is unlikely to be material. Foreign currency fluctuations had a slightly positive impact on net income for the years ended
September 30, 2022 and 2023 and a negative impact on net income for the six months ended March 31, 2024. For the years ended September
30, 2022 and 2023, the foreign exchange gains were $72,974 and $118,508, respectively. For the six months ended March 31, 2023 and
2024, the foreign exchange gain was $71,299 and foreign exchange loss was $142,194, respectively.
Impact
of COVID-19
Since
late December 2019, the outbreak of COVID-19 spread rapidly throughout China and later to the rest of the world. On January 30, 2020,
the International Health Regulations Emergency Committee of the World Health Organization declared the outbreak a PHEIC, and later on
March 11, 2020, a global pandemic. The COVID-19 outbreak has led governments across the globe to impose a series of measures intended
to contain its spread, including border closures, travel bans, quarantine measures, social distancing, and restrictions on business operations
and large gatherings. From 2020 to the middle of 2021, COVID-19 vaccination programs had been greatly promoted around the globe, however
several types of COVID-19 variants emerged in different parts of the world.
Supply
chain disruptions have become a major challenge for the global economy since the start of the COVID-19 pandemic. These shortages and
supply-chain disruptions are significant and widespread. Lockdowns in several countries across the world, labor shortages, robust demand
for tradable goods, disruptions to logistics networks, and capacity constraints have resulted in increases in freight costs and delivery
times. Companies that are reliant on the transportation of goods and materials, such as our Company, which relies on transportation services
from our suppliers, may suffer from plant closures and supply shortages across the extended supply network.
Furthermore,
our business may be adversely affected if concerns relating to COVID-19 continue to restrict travel, or result in the Company’s
personnel, vendors, and services providers being unavailable to pursue their business objectives free of COVID-19 related restrictions.
The extent to which COVID-19 impacts our business in the future will depend on future developments, which are highly uncertain and cannot
be predicted, including new information that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat
its impact, among others. If the disruptions posed by COVID-19 or other matters of global concerns continue for an extended period of
time, our ability to pursue our business objectives may be materially adversely affected. In addition, our ability to raise equity and
debt financing, which may be adversely impacted by COVID-19 and other events, including as a result of increased market volatility, decreased
market liquidity and third-party financing became unavailable on terms acceptable to us or at all.
Any
future impact on our results of operations will depend on, to a large extent, future developments and new information that may emerge
regarding the duration and severity of the COVID-19 pandemic and the actions taken by government authorities and other entities to contain
the spread or treat its impact, almost all of which are beyond our control. Given the general slowdown in economic conditions globally
and volatility in the capital markets, as well as the general negative impact of the COVID-19 outbreak on the logistics and freight forwarding
industry, we cannot assure you that we will be able to maintain the growth rate we have experienced or projected. However, we note that
the government authorities have gradually uplifted the preventive measures in relation to COVID-19. For instance, on January 30, 2023,
the Hong Kong government has ceased to issue any isolation orders to COVID-19 infectants. On May 5, 2023, the World Health Organization
(WHO) announced that COVID-19 no longer constitutes a public health emergency of international concern (PHEIC). On May 30, 2023, the
Hong Kong government has lowered the response level of COVID-19 from emergency level to alert level. We expect that the adverse effects of COVID-19 will diminish in 2024. We
will continue to closely monitor the situation throughout 2024 and beyond.
RESULTS
OF OPERATIONS
The
following table summarizes our consolidated statements of operations for the periods indicated. This information should be read together
with our consolidated financial statements and related notes included elsewhere in this prospectus. The operating results in any period
are not necessarily indicative of the results that may be expected for any future period.
Comparison
of Year Ended September 30, 2022 and 2023
| |
Years ended September 30, | |
| |
2022 | | |
2023 | |
| |
US$ | | |
US$ | |
Revenue | |
| | | |
| | |
Integrated cross-border logistics services | |
| 19,444,182 | | |
| 16,872,539 | |
Air freight forwarding services | |
| 4,577,014 | | |
| 1,713,989 | |
| |
| 24,021,196 | | |
| 18,586,528 | |
| |
| | | |
| | |
Cost of revenue | |
| 22,615,318 | | |
| 16,680,941 | |
Gross profit | |
| 1,405,878 | | |
| 1,905,587 | |
| |
| | | |
| | |
General and administrative expenses | |
| 588,732 | | |
| 758,726 | |
Income from operation | |
| 817,146 | | |
| 1,146,861 | |
| |
| | | |
| | |
Other income (expense) | |
| | | |
| | |
Interest income | |
| 108 | | |
| 3,481 | |
Interest expense | |
| (2,755 | ) | |
| (1,066 | ) |
Other income | |
| 122,289 | | |
| 120,367 | |
Total other income/(expense), net | |
| 119,642 | | |
| 122,782 | |
Income before income taxes | |
| 936,788 | | |
| 1,269,643 | |
Income tax expenses | |
| 126,561 | | |
| 192,251 | |
Net income | |
$ | 810,227 | | |
$ | 1,077,392 | |
Revenues
Our
revenue decreased by $5,434,668, or 22.6%, from $24,021,196 for the year ended September 30, 2022 to $18,586,528 for the year ended September
30, 2023, primarily due to the decrease in the integrated cross-border logistics services and air freight forwarding services in 2023.
Our
revenue from integrated cross-border logistics services decreased by $2,571,643, or 13.2%, from $19,444,182 for the year ended September
30, 2022 to $16,872,539 for the year ended September 30, 2023. The revenue was derived from the integrated cross-border logistics services
for delivering goods from Hong Kong to Australia and New Zealand. Logistics income is recognized over the logistics time. The decrease
of revenue from the integrated cross-border logistics services is due to the higher average sales price per freight weight which drives
down sales demand and volume from customers.
The
following table set forth the breakdown of our revenue analysis for integrated cross-border logistics services for the periods indicated:
| |
Years ended September 30, | |
| |
2022 | | |
2023 | |
Average daily number of packages | |
| 5,890 | | |
| 5,654 | |
Average daily freight weight (kilogram) | |
| 2,765 | | |
| 1,896 | |
Average daily number of shipments | |
| 3.09 | | |
| 2.81 | |
Average daily revenue per freight weight | |
$ | 19.27 | | |
$ | 24.38 | |
Our
revenue from air freight forwarding services decreased by $2,863,025, or 62.6%, from $4,577,014 for the year ended September 30, 2022
to $1,713,989 for the year ended September 30, 2023. The Company sells air freight spaces to other freight forwarders to earn income
through the price differences. Air freight forwarding revenue is recognized upon the completion of the transaction. The decrease of such
revenue is mainly because the Company was focused on selling the air freight spaces with high unit prices in 2023, which lowered
the sales volume. The number of air freight spaces sold decreased from 219 for the year ended September 30, 2022 to 146 for the year
ended September 30, 2023.
Cost
of Revenue
The
following table set forth the breakdown of our cost of revenue for the periods indicated:
| |
Years ended September 30, | |
| |
2022 | | |
2023 | |
Air freight charges | |
$ | 12,261,846 | | |
$ | 7,113,911 | |
Last mile carriage and alliance costs | |
| 10,230,017 | | |
| 9,415,448 | |
Warehouse labor costs | |
| 79,496 | | |
| 133,437 | |
Packing costs | |
| 43,959 | | |
| 18,145 | |
| |
$ | 22,615,318 | | |
$ | 16,680,941 | |
Our
cost of revenue mainly represented air freight charges, last mile carriage and alliance costs, packaging costs and labor costs. Our cost
of revenue decreased by $5,934,377, or 26.2%, from $22,615,318 for the year ended September 30, 2022 to $16,680,941 for the year ended
September 30, 2023, mainly due to decrease in air freight and courier expenses to fulfill the decreased sales transactions.
Our
air freight charges mainly represented costs of air freight services. Our air freight charges decreased by $5,147,935, or 42.0%, from
$12,261,846 for the year ended September 30, 2022 to $7,113,911 for the year ended September 30, 2023, mainly due to the decreased sales
from both air freight forwarding services and integrated cross-border logistics services and lower air freight rates offered by suppliers
during the year ended September 30, 2023.
Our
last mile carriage and alliance costs mainly represented courier service charges, customs clearance fees and other alliance service charges.
Our last mile carriage and alliance costs decreased by $814,569, or 8.0%, from $10,230,017 for the year ended September 30, 2022 to $9,415,448
for the year ended September 30, 2023, mainly due to less delivery orders from integrated cross-border logistics services.
Our
warehouse labor costs mainly represented salaries and wages of warehouse staff. Our warehouse labor costs increased by $53,941, or 67.9%,
from $79,496 for the year ended September 30, 2022 to $133,437 for the year ended September 30, 2023, mainly due to more part-time workers
hired to improve work efficiency. For the year ended September 30, 2022, some warehouse works were contributed by several full-time employees
which salaries were incurred in general and administrative expenses instead of recording as warehouse labor costs.
Our
packing costs mainly represented packing materials, including boxes and labels, for repacking customers’ products. Our packing
costs decreased by $25,814, or 58.7%, from $43,959 for the year ended September 30, 2022 to $18,145 for the year ended September 30,
2023, mainly due to less packing materials used for declined sales from integrated cross-border logistics services.
Gross
Profit
Our
gross profit increased by 35.5% to $1,905,587 for the year ended September 30, 2023, from $1,405,878 for the year ended September 30,
2022. Our gross profit margin increased to 10.3% for the year ended September 30, 2023, from 5.9% for the year ended September 30, 2022.
The increase in gross profit margin could be attributed to the lower freight costs and higher sales unit prices.
General
and Administrative Expenses
The
following table set forth the breakdown of our general and administrative expenses for the periods indicated:
| |
Years ended September 30, | |
| |
2022 | | |
2023 | |
Staff costs | |
$ | 383,959 | | |
$ | 370,826 | |
Travel expenses | |
| 69,383 | | |
| 171,667 | |
Insurance | |
| 1,559 | | |
| 45,056 | |
Depreciation Charge and Amortization of right-of-use assets | |
| 61,484 | | |
| 50,834 | |
Allowance for (reversal of) expected credit loss | |
| 335 | | |
| 44,765 | |
Others | |
| 72,012 | | |
| 75,578 | |
| |
$ | 588,732 | | |
$ | 758,726 | |
Our
general and administrative expenses mainly represented staff costs, audit fees, traveling expenses, depreciation charge, amortization
of right-of-use assets, allowance for expected credit loss and other administrative expenses. Our general and administrative expenses
increased by $169,994, or 28.9%, from $588,732 for the year ended September 30, 2022 to $758,726 for the year ended September 30, 2023,
mainly due to audit fees expensed off and increase in allowance for expected credit loss.
Our
audit fees mainly represent annual audit fees incurred by the Company and its subsidiary. Audit fees increased by $170,000, or 10,198.0%,
from $1,667 for the year ended September 30, 2022 to $171,667 for the year ended September 30, 2023. This was mainly due to the professional
services fees on the annual audit for the consolidated financial statement of the Company for the year ended September 30, 2023, as the
audit fees were recorded as deferred offering costs for the year ended September 30, 2022.
Our
staff costs mainly represent staff salaries, contribution to staff retirement benefits and staff welfare for office staff and director.
Staff costs decreased by $13,133, or 3.4%, from $383,959 for the year ended September 30, 2022 to $370,826 for the year ended September
30, 2023. This was mainly due to the staff turnover and the Company lowering the staff salaries for the new staff replacement.
Our
travel expenses decreased by $24,327, or 35.1%, from $69,383 for the year ended September 30, 2022 to $45,056 for the year ended September
30, 2023 mainly due to decrease in travelling activities in 2023 compared to the prior year.
Our
amortization of right-of-use assets mainly represented our operating lease of our Hong Kong office and warehouse on 18th and
24th floors of Tsuen Wan Industrial Centre. There was a decrease of 21.8% mainly due to the early termination of the
operating lease of 24th of Tsuen Wan Industrial Centre during the year ended September 30, 2023, in order to centralize the
warehouse operation for better management. Our depreciation charge mainly represented depreciation of our fixtures, furniture
and office equipment. Our depreciation charge increased by 180.1% for the year ended September 30, 2023, which was mainly due to the
additional computer equipment.
Other
Income/Expenses
Our
other income mainly consists of interest income, interest expenses, foreign exchange gain/loss, government grants and insurance claim
income. Our net other income was $119,642 for the year ended September 30, 2022, as compared to net other income of $122,782 for the
year ended September 30, 2023, primarily due to decrease in government grants from Employment Support Scheme under the Anti-epidemic
Fund, and also, there were no insurance compensation claims for the year ended September 30, 2023, as the Company decided
to compensate the loss of its customers directly instead of covering by an insurance policy.
The
foreign exchange gains of $72,974 and $118,508 for the years ended September 30, 2022 and 2023, respectively, were primarily a result of net variances of the exchange rate between the Australian dollars and Hong Kong dollars on Australian dollar-denominated
transactions. During the years ended September 30, 2022 and 2023, the foreign currency fluctuations on the Company are not hedged by
any currency borrowings or other hedging instruments.
Income
Tax Expense
The
Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity
is domiciled.
Cayman
Islands and British Virgin Islands (“BVI”)
The
Company is incorporated in the Cayman Islands and its wholly-owned subsidiary is incorporated in BVI. Under the current laws of the Cayman
Islands and the BVI, these entities are not subject to income or capital gains taxes. In addition, dividend payments are not subject
to withholdings tax in the Cayman Islands and the BVI.
Hong
Kong
The
Company generated substantially all of its taxable income in Hong Kong for the years ended September 30, 2022 and 2023. Accordingly,
tax expenses records in the Company’s result of operations are almost entirely attributable to income earned in Hong Kong.
The
Hong Kong profits tax is calculated at 8.25% on the first HK$2 million of the estimated assessable profits and at 16.5% on the estimated
assessable profits above HK$2 million.
The
effective tax rates on income before income taxes for the years ended September 30, 2022 and 2023 were approximately 13.5% and 15.1%,
respectively.
Australia
Australian
companies are subject to a corporate income tax rate of 30% on their taxable income, other than those classified as a “base rate
company”, which are businesses with revenue of less than A$50 million (US$78 million) that are subject to a reduced corporate income
tax rate of 25%. For the years ended September 30, 2022 and 2023 and the six months ended March 31, 2024, the Company was not considered a taxable Australian company.
New
Zealand
New
Zealand companies are subject to a corporate income tax rate of 28% on their taxable income. For the years ended September 30, 2022 and 2023 and the six months ended March 31, 2024,
the Company was not considered a taxable New Zealand company.
Net
Income
Our
net income increased by 33.0% to $1,077,392 for the year ended September 30, 2023, as compared to $810,227 for the year ended September
30, 2022. The increase in net income was predominantly due to increased gross profit.
Comparison
of Six Months Ended March 31, 2023 and 2024
| |
Six months ended March 31, | |
| |
2023 | | |
2024 | |
| |
US$ | | |
US$ | |
Revenue | |
| | | |
| | |
Integrated cross-border logistics services | |
| 8,923,224 | | |
| 7,659,537 | |
Air freight forwarding services | |
| 477,346 | | |
| 725,253 | |
| |
| 9,400,570 | | |
| 8,384,790 | |
| |
| | | |
| | |
Cost of revenue | |
| 8,684,797 | | |
| 6,726,294 | |
Gross profit | |
| 715,773 | | |
| 1,658,496 | |
| |
| | | |
| | |
General and administrative expenses | |
| 272,113 | | |
| 505,105 | |
Income from operation | |
| 443,660 | | |
| 1,153,391 | |
| |
| | | |
| | |
Other income (expense) | |
| | | |
| | |
Interest income | |
| 745 | | |
| 29,323 | |
Interest expense | |
| (557 | ) | |
| (1,612 | ) |
Other income | |
| 73,158 | | |
| (142,178 | ) |
Total other income/(expense), net | |
| 73,346 | | |
| (114,467 | ) |
Income before income taxes | |
| 517,006 | | |
| 1,038,924 | |
Income tax expenses | |
| 66,198 | | |
| 140,129 | |
Net income | |
$ | 450,808 | | |
$ | 898,795 | |
Revenues
Our
revenue decreased by $1,015,780 or 10.8%, from $9,400,570 for the six months ended March 31, 2023 to $8,384,790 for the six months ended
March 31, 2024, primarily due to the decrease in the integrated cross-border logistics services in 2024. Our revenue from integrated
cross-border logistics services decreased by $1,263,687, or 14.2%, from $8,923,224 for the six months ended March 31, 2023 to $7,659,537
for the six months ended March 31, 2024. The decrease in revenue from integrated cross-border logistics services was attributed primarily
to the implementation of relatively higher average sales prices by the Company in 2024, which subsequently led to a decrease in sales
demand and volume from customers.
The
following table set forth the breakdown of our revenue analysis for integrated cross-border logistics services for the periods indicated:
| |
Six months ended March 31, | |
| |
2023 | | |
2024 | |
Average daily number of packages | |
| 5,790 | | |
| 5,513 | |
Average daily freight weight (kilogram) | |
| 2,396 | | |
| 1,939 | |
Average daily number of shipments | |
| 3.32 | | |
| 2.74 | |
Average daily revenue per freight weight | |
$ | 21.56 | | |
$ | 23.63 | |
Our
revenue from air freight forwarding services increased by $247,907, or 51.9%, from $477,346 for the six months ended March 31, 2023 to
$725,253 for the six months ended March 31, 2024. The Company sells cargo spaces obtained from air freight forwarders and air freight
carriers under the block space agreements to other air freight forwarders by leveraging the price differences to earn revenue. Such revenue
is recognized upon the completion of the transaction as air freight forwarding service revenue.
The
increase of the air freight forwarding services for the six months ended March 31, 2024 is primarily due to the increase of revenue derived
from such resale of cargo space, as the overall supply of the air freight cargo spaces in the market has been increased due to the gradual
resumption of air freight capacity after the pandemic, leading to the increased flight frequency and additional air freight routes, and
eventually to a decrease in airfare prices compared to the time during the pandemic.
Cost
of Revenue
The
following table set forth the breakdown of our cost of revenue for the periods indicated:
| |
Six months ended March 31, | |
| |
2023 | | |
2024 | |
Air freight charges | |
$ | 3,565,445 | | |
$ | 2,563,811 | |
Last mile carriage and alliance costs | |
| 5,053,500 | | |
| 4,062,977 | |
Warehouse labor costs | |
| 51,943 | | |
| 82,450 | |
Packing costs | |
| 13,909 | | |
| 17,056 | |
| |
$ | 8,684,797 | | |
$ | 6,726,294 | |
Our
cost of revenue mainly represented air freight charges, last mile carriage and alliance costs, packaging costs and labor costs. Our cost
of revenue decreased by $1,958,503, or 22.6%, from $8,684,797 for the six months ended March 31, 2023 to $6,726,294 for the six months
ended March 31, 2024, mainly due to decrease in air freight and last mile carriage expenses which in line with the drop of the air freight
costs and decline in revenue from integrated cross-border logistics services.
Our
air freight charges mainly represented costs of air freight services. Our air freight charges decreased by $1,001,634, or 28.1%, from
$3,565,445 for the six months ended March 31, 2023 to $2,563,811 for the six months ended March 31, 2024, mainly due to the decrease
in air freight costs from suppliers and decline in sales orders from integrated cross-border logistics services.
Our
last mile carriage and alliance costs mainly represented courier service charges, customs clearance fees and other alliance service charges.
Our last mile carriage and alliance costs decreased by $990,523, or 19.6%, from $5,053,500 for the six months ended March 31, 2023 to
$4,062,977 for the six months ended March 31, 2024, mainly due to the decreased sales from integrated cross-border logistics services
during the six months ended March 31, 2024
Our
warehouse labor costs mainly represented salaries and wages of warehouse staff. Our warehouse labor costs increased by $30,507, or 58.7%,
from $51,943 for the six months ended March 31, 2023 to $82,450 for the six months ended March 31, 2024, mainly due to more part-time
workers hired.
Our
packing costs mainly represented packing materials, including boxes and labels, for repacking customers’ products. Our packing
costs increased by $3,147, or 22.6%, from $13,909 for the six months ended March 31, 2023 to $17,056 for the six months ended March 31,
2024, mainly due to the increase in packaging material costs for the integrated cross-border logistics services.
Gross
Profit
Our
gross profit increased by $942,723, or 131.7%, from $715,773 for the six months ended March 31, 2023 to $1,658,496 for the six months
ended March 31, 2024. Our gross profit margin increased to 19.8% for the six months ended March 31, 2024, from 7.6% for the six months
ended March 31, 2023. The increase in gross profit margin could be attributed to our costs controlled effectively by liaising better
terms and lower airfare charges with air freight suppliers.
General
and Administrative Expenses
The
following table set forth the breakdown of our general and administrative expenses for the periods indicated:
| |
Six months ended March 31, | |
| |
2023 | | |
2024 | |
Staff costs | |
$ | 177,210 | | |
$ | 134,965 | |
Travel expenses | |
| 25,315 | | |
| 131,818 | |
Audit fees | |
| 833 | | |
| 85,833 | |
Legal and professional fees | |
| 897 | | |
| 86,955 | |
Depreciation Charge and Amortization of right-of-use assets | |
| 26,475 | | |
| 25,508 | |
Allowance for (reversal of) expected credit loss | |
| 21,974 | | |
| (24,012 | ) |
Others | |
| 19,409 | | |
| 64,038 | |
| |
$ | 272,113 | | |
$ | 505,105 | |
Our
general and administrative expenses mainly represented staff costs, traveling expenses, audit fees, legal and professional fees,
depreciation charge, amortization of right-of-use assets, allowance for expected credit loss and other administrative expenses. Our
general and administrative expenses increased by $232,992, or 85.6%, from $272,113 for the six months ended March 31, 2023 to
$505,105 for the six months ended March 31, 2024, mainly due to increase in travel expenses, audit fees and legal and professional
fees upon Listing during the six months ended March 31, 2024.
Our
travel expenses significantly increased by $106,503, or 420.7%, from $25,315 for the six months ended March 31, 2023 to $131,818 for
the six months ended March 31, 2024. This was mainly due to the increase in travelling activities upon Listing and more business trips
to maintain better business relationship during the six months ended March 31, 2024.
Our
audit fees significantly increased by $85,000, or 10,204.1%, from $833 for the six months ended March 31, 2023 to $85,833 for the six
months ended March 31, 2024. This was mainly due to the increase in accrued audit fees to the professional external auditors during the
six months ended March 31, 2024.
Our
legal and professional fees significantly increased by $86,058, or 9,594.0%, from $897 for the six months ended March 31, 2023 to $86,955
for the six months ended March 31, 2024. This was mainly due to the increase in service fees with legal advisor and other professional
parties after Listing during the six months ended March 31, 2024.
Other
Income/Expenses
Our
other income mainly consists of interest income, interest expenses, foreign exchange gain/loss, government grants and insurance claim
income. Our net other income was $73,346 for the six months ended March 31, 2023, as compared to net other expenses of $114,467 for the
six months ended March 31, 2024, primarily due to foreign exchange loss net off.
We
recorded foreign exchange gain of $71,299 for the six months ended March 31, 2023 and foreign exchange loss of $142,194 for the six months
ended March 31 2024, primarily as a result of net variances of the exchange rate between the Australian dollars and Hong Kong dollars
on Australian dollar-denominated transactions. During the six months ended March 31, 2023 and 2024, the foreign currency fluctuations
on the Company are not hedged by any currency borrowings or other hedging instruments.
Income
Tax Expense
The
Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity
is domiciled.
Cayman
Islands and British Virgin Islands (“BVI”)
The
Company is incorporated in the Cayman Islands and its wholly-owned subsidiary is incorporated in BVI. Under the current laws of the Cayman
Islands and the BVI, these entities are not subject to income or capital gains taxes. In addition, dividend payments are not subject
to withholdings tax in the Cayman Islands and the BVI.
Hong
Kong
The
Company generated substantially all of its taxable income in the Hong Kong for the six months ended March 31, 2023 and 2024. Accordingly,
tax expenses records in the Company’s result of operations are almost entirely attributable to income earned in the Hong Kong.
The
Hong Kong profits tax is calculated at 8.25% on the first HK$2 million of the estimated assessable profits and at 16.5% on the estimated
assessable profits above HK$2 million.
The
effective tax rates on income before income taxes for the six months ended March 31, 2023 and 2024 were approximately 12.8% and 13.49%,
respectively.
Australia
Australian
companies are subject to a corporate income tax rate of 30% on their taxable income, other than those classified as a “base rate
company”, which are businesses with revenue of less than A$50 million (US$78 million) that are subject to a reduced corporate income
tax rate of 25%. For the six months ended March 31, 2023 and 2024, the Company was not considered a taxable Australian company.
New
Zealand
New
Zealand companies are subject to a corporate income tax rate of 28% on their taxable income. For the six months ended March 31, 2023
and 2024, the Company was not considered a taxable New Zealand company.
Net
Income
Our
net income increased by $447,987 or 99.4% to $898,795 for the six months ended March 31, 2024, as compared to $450,808 for six months
ended March 31, 2023. The increase in net income was predominantly due to increased gross profit from the integrated cross-border logistics
services.
Liquidity
and Capital Resources
For
the years ended September 30, 2022 and 2023 and the six months ended March 2023 and 2024, we have financed our operations primarily through cash generated from our
business operation and capital contributions by our shareholder.
As
of September 30, 2023, we have working capital of $128,745 as compared to working capital of $499,500 as of September 30, 2022. The total
current assets increased 90.0%, from $2,116,028 on September 30, 2022 to $4,021,110 on September 30, 2023, mainly because of an
increase in deferred costs which represented the professional listing fees settled and accrued for the year ended September 30, 2023.
The total current liabilities increased 140.8%, from $1,616,528 on September 30, 2022 to $3,892,365 as of September 30, 2023. The increase
in our current liabilities is mainly due to an increase in accounts payables and unpaid offering cost.
While
our accounts receivable increased from $1,111,998 as of September 30, 2022 to $1,429,299 as of September 30, 2023, our working capital
deceased from $499,500 as of September 30, 2022 to $128,745 as of September 30, 2023. The decrease of working capital was mainly due
to a dividend paid of $1,474,359 for the year ended September 30, 2023.
As
of March 31, 2024, we have working capital of $ 3,523,188 as compared to working capital of $128,745 as of September 30, 2023. The
total current assets increased 27.7%, from $4,021,110 on September 30, 2023 to $5,133,249 in March 31, 2024, mainly because of the
increase in cash and cash equivalents from the proceeds received from issuance of Ordinary Shares and the increase in profit
attributable to the Company for the six months ended March 31, 2024. The total current liabilities decreased 58.6%, from $3,892,365
on September 30, 2023 to $1,610,061 as of March 31, 2024. The decrease in our current liabilities is mainly due to a decrease in
accounts and other payables.
Saved
for the proceeds received from issuance of Ordinary Shares in the IPO, we
also received capital injections by our shareholder of $126,923, nil and nil for the years ended September 30, 2022
and 2023 and for the six months March 31, 2024, respectively.
We
did not experience or identify any material trends or any known demands, commitments, events or uncertainties, in our liquidity,
capital resources and results of operations, such as material commitments for capital expenditures and deposit on a short-term
basis. Based on our total cash and cash equivalents as of March 31, 2024, we
believe that our current cash and cash equivalents will be sufficient to meet our working capital needs in the next 12 months
following this offering.
As
of September 30, 2022 and 2023 and March 31, 2023 and 2024, the Company had a banking facility arrangement for a bank guarantee
line with maximum amount of HK$3,690,000, which guaranteed by Mr. Wai Yiu Yau, the director of the Company, and secured by bank deposit
from time to time charged in the bank’s favor. The outstanding principal as of September 30, 2023, March 31, 2023 and 2024 is
nil, $232,051 and nil, respectively.
In
the long run, if we need additional capital in the future to fund our continued operations and our cash requirements exceed
the amount of cash and cash equivalents we have on hand at that time, we may seek to issue equity or debt securities or obtain credit
facilities. The issuance and sale of additional equity or convertible loans would result in dilution to our shareholders. The occurrence
of indebtedness would result in increased fixed obligations and could result in operating covenants that might restrict our operations.
We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.
The
following table set forth our current assets and current liabilities as of the dates indicated:
| |
As of September 30, | | |
As of March 31, | |
| |
2022 | | |
2023 | | |
2024 | |
Current assets | |
| | | |
| | | |
| | |
Cash and cash equivalents | |
$ | 557,735 | | |
$ | 554,132 | | |
$ | 2,549,766 | |
Accounts receivable, net | |
| 1,111,998 | | |
| 1,429,299 | | |
| 726,383 | |
Deposits and prepayment | |
| 11,538 | | |
| 17,566 | | |
| 1,072,348 | |
Prepayment – related party | |
| - | | |
| 169,834 | | |
| 32,721 | |
Deferred costs | |
| - | | |
| 1,306,441 | | |
| 300,000 | |
Contract assets | |
| 434,757 | | |
| 543,838 | | |
| 452,031 | |
Total current assets | |
| 2,116,028 | | |
| 4,021,110 | | |
| 5,133,249 | |
| |
| | | |
| | | |
| | |
Current liabilities | |
| | | |
| | | |
| | |
Accounts payables | |
| 1,311,067 | | |
| 2,601,253 | | |
| 520,615 | |
Accounts payables – related party | |
| 175,479 | | |
| - | | |
| 261,770 | |
Other payables and accrued liabilities | |
| 13,043 | | |
| 1,096,016 | | |
| 646,197 | |
Taxes payables | |
| 52,314 | | |
| 155,210 | | |
| 140,756 | |
Lease liabilities - current | |
| 64,625 | | |
| 39,886 | | |
| 40,723 | |
Total current liabilities | |
| 1,616,528 | | |
| 3,892,365 | | |
| 1,610,061 | |
Net current assets | |
$ | 499,500 | | |
$ | 128,745 | | |
$ | 3,523,188 | |
Cash
and cash equivalents
Cash
and cash equivalents consist of funds deposited with banks, which are highly liquid and are unrestricted as to withdrawal or use.
The
total balance of cash and cash equivalents decreased from $557,735 as of September 30, 2022 to $554,132 as of September 30, 2023. The
decrease in the balance of cash and cash equivalents was mainly due to the net cash generated from operation of $2,021,831 which offset
with the dividend paid of $1,474,359 and the payment of offering costs of $543,620 for the year ended September 30, 2023.
The total balance of cash and cash equivalents increased from $0.6
million as of September 30, 2023 to $2.5 million as of March 31, 2024. The increase in the balance of cash and cash equivalents was mainly
due to the proceeds from the issuance of Ordinary Shares, net of issuance cost, of $5,379,500 and net off with the payment of offering
costs of $1,756,440 for the six months ended March 31, 2024.
Accounts
Receivable, net
Our
accounts receivable represented receivables from customers of our logistics and air freight forwarding services. Credit periods for customers
are normally within 7 to 90 days after customers have received the services provided by the Company.
Our
accounts receivable, net increased by $317,301, or 28.5% from $1,111,998 as of September 30, 2022 to $1,429,299 as of September 30, 2023.
The increase was mainly attributable to the increase in revenue near the year end.
Our accounts receivable, net decreased by $702,916,
or 49.2% from $1,429,299 as of September 30, 2023 to $726,383 as of March 31, 2024. The decrease was mainly attributable to the decrease
in revenue near the period end.
An
impairment analysis is performed at the end of each year. For the year ended September 30, 2022, there was a reversal of allowance for
expected credit loss for $522. There was an allowance for expected credit loss amounting to $33,466 made in the year ended September
30, 2023. There was a reversal of allowance for expected credit loss amounting to
$21,789 made in the six months ended March 31, 2024.
Deposits
and prepayment
Deposits
and prepayment consist of trade deposits, deposits of rental and utility, prepayment paid to suppliers for freight services and prepayment paid to professional parties for corporate financing arrangement.
Deposits
and prepayment increased significantly by $175,862, or 1,524.2% from $11,538 as of September 30, 2022 to $187,400 as of September
30, 2023. The increase was mainly due to the increase in prepayment with suppliers and related parties.
Deposits
and prepayment increased by $917,669, or 489.7% from
$187,400 as of September 30, 2023 to $1,105,069 as of March 31, 2024. The increase was mainly due to the increase in prepayment for
warehouse equipment and accounting system, prepayment with professional parties for corporate financing arrangement and with
suppliers for freight services.
Contract
assets
Contract
assets include billed and unbilled amounts resulting from in-transit shipments, as the Company has an unconditional right to payment
only when services have been completed (i.e., shipments have been delivered). Upon completion of the performance obligations, which can
vary in duration based upon the method of transport, these amounts become classified within accounts receivable.
Contract assets increased
by $109,081 or 25.1% from $434,757 as of September 30, 2022 to $543,838 as of September 30, 2023. The increase was mainly due to more
in-transit deliveries that were not yet delivered to the customers near the year end 2023.
Contract assets decreased by $91,807 or
16.9% from $543,838 as of September 30, 2023 to $452,031 as of March 31, 2024. The decrease was mainly due to less in-transit deliveries
that have not yet delivered to the customers near the six months ended March 31, 2024.
An
impairment analysis is performed at the end of each year. For the year ended September 30, 2022, there was an allowance for expected
credit loss for $857. There was an allowance for expected credit loss amounting to $11,299 made in the year ended September 30, 2023.
There was a reversal of allowance for expected credit loss amounting to $2,223 made in the six months ended March 31, 2024.
Deferred
costs
Deferred
offering costs consist principally of incremental direct costs resulting from the share offering incurred by the Company,
such as underwriting, legal, accounting, consulting, printing, and other registration related costs in connection with the offering
of the Company’s Ordinary Shares. Such costs are deferred until the closing of the offering, at which time the deferred costs
are offset against the offering proceeds. In the event the offering is unsuccessful or aborted, the costs will be
expensed.
Accounts
payable
The
accounts payable are derived from logistics and air freight service providers. The accounts payable increased by $1,290,186, or 98.4%
from $1,311,067 as of September 30, 2022 to $2,601,253 as of September 30, 2023. The balances arise from logistics service providers
were settled within 7 to 30 days. The increase was mainly due to outstanding supplier invoices related to the air freight costs for the
year ended September 30, 2023.
The accounts payable decreased by $2,080,638
or 80.0% from $2,601,253 as of September 30, 2023 to $520,615 as of March 31, 2024. The decrease was mainly due to the material repayment
of outstanding freight charges subsequent to September 30, 2023 and the Company kept better payment management with suppliers for the
period ended March 31, 2024.
Accounts
payable – related party
Accounts
payable – related party amounted to $175,479 and nil as of September 30, 2022 and September 30, 2023, respectively. For the year
ended September 30, 2022, this balance consists of accounts payable to a related company arising from unsettled courier service fees.
Accounts payable – related party amounted to nil
and $261,770 as of September 30, 2023 and March 31, 2024, respectively. This balance consists of accounts payable to a related company
arising from last mile service fees.
Other
payables and accrued liabilities
The
line item consists of accrued payroll expenses, audit fees, other administrative expenses and accrued offering costs. The balance increased
significantly by $1,082,973, or 8,303.1% from $13,043 as of September 30, 2022 to $1,096,016 as of September 30, 2023. The increase
was mainly due to the increase of accrued offering costs and audit expenses.
The balance decreased
by $449,819, or 41.0% from $1,096,016 as of September 30, 2023 to $646,197 as of March 31, 2024. The decrease was mainly due to the
repayment of listing fees.
Lease
liabilities – current
Our
lease liabilities represented the current portion of the operating lease of our Hong Kong office and warehouse.
The Company combines the lease
and non-lease components in determining the ROU assets and related lease obligation. Adoption of this standard resulted in the recording
of operating lease ROU assets and corresponding operating lease liabilities. ROU assets and related lease obligations are recognized
at commencement date based on the present value of remaining lease payments over the lease term.
The
Company’s management believes that the Hong Kong Dollar Best Lending Rate (“BLR”) was the most indicative rate of the
Company’s borrowing cost for the calculation of the present value of the lease payments; the rate used by the Company as quoted
by the BLR minus 2.5%
Cash
Flow
Our
use of cash is primarily related to operating activities, payment of dividends, investing activities and payment of IPO cost.
We have historically financed our operations primarily through our cash flow generated from our operations and financing activities. The following table
sets forth a summary of our cash flows information for the years/periods indicated:
| |
Years ended September 30, | |
| |
2022 | | |
2023 | |
Net cash provided by operating activities | |
$ | 783,045 | | |
$ | 2,021,831 | |
Net cash used in investing activities | |
| (9,247 | ) | |
| (7,455 | ) |
Net cash used in financing activities | |
| (1,244,502 | ) | |
| (2,017,979 | ) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | |
| (470,704 | ) | |
| (3,603 | ) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | |
| 1,028,439 | | |
| 557,735 | |
CASH AND CASH EQUIVALENTS AT END OF YEAR | |
$ | 557,735 | | |
$ | 554,132 | |
| |
Six months ended March 31, | |
| |
2023 | | |
2024 | |
Net cash provided by (used in) operating activities | |
$ | 1,157,621 | | |
$ | (256,581 | ) |
Net cash used in investing activities | |
| (2,824 | ) | |
| (473,409 | ) |
Net cash (used in) provided by financing activities | |
| (110,000 | ) | |
| 2,725,624 | |
NET CHANGE IN CASH AND CASH EQUIVALENTS | |
| 1,044,797 | | |
| 1,995,634 | |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | |
| 557,735 | | |
| 554,132 | |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | |
$ | 1,602,532 | | |
$ | 2,549,766 | |
Operating
Activities
Our
cash inflow from operating activities was principally from the receipt of revenue. Our cash outflow used in operating activities was
principally for payment of supplier costs and operating expenses.
Net
cash provided by operating activities was $2,021,831 for the year ended September 30, 2023, compared to net cash provided by operating
activities of $783,045 for the year ended September 30, 2022, representing an increase of approximately $1.2m in the net cash
inflow in operating activities. The increase in net cash provided by operating activities was primarily due to the following major working
capital changes:
(1) |
Change
in accounts receivable resulted in a cash outflow of $350,767 for the year ended September 30, 2023 compared to a cash outflow of
$285,640 for the same period of 2022, which led to an approximately $65,000 decrease in net cash inflow in operating activities. |
(2) |
Change
in deposits and prepayment resulted in a cash outflow of $175,862 for the year ended September 30, 2023 compared to a cash outflow
of $146,442 for the same period of 2022, which led to an approximately $29,000 decrease in net cash inflow in operating activities. |
(3) |
Change
in accounts payable and accounts payable – related party resulted in a cash inflow of $1,114,707 for the year ended September
30, 2023 compared to a cash inflow of $520,143 for the same period of 2022, which led to an approximately $595,000 increase in net
cash inflow in operating activities. |
(4) |
Change
in other payables and accrued liabilities resulted in a cash inflow of $320,152 for the year ended September 30, 2023 compared to
a cash outflow of $5,415 for the same period of 2022, which led to an approximately $326,000 increase in net cash inflow in operating
activities. |
(5) |
Change
in contract liabilities resulted in a cash outflow of nil for the year ended September 30, 2023 compared to a cash outflow of $24,157
for the same period of 2022, which led to an approximately $24,000 increase in net cash inflow in operating activities. |
(6) |
Change
in tax payables resulted in a cash inflow of $102,896 for the year ended September 30, 2023 compared to a cash outflow of $13,975
for the same period of 2022, which led to an approximately $117,000 increase in net cash inflow in operating activities. |
(7) |
Net
income of $1,077,392 in the year ended September 30, 2023 compared net income of $810,227 to the same period of 2022, which led to
an approximately $267,000 increase in net cash inflow in operating activities. |
Net
cash used in operating activities was $256,581 for the six months ended March 31, 2024, compared to net cash provided by operating activities
of $1,157,621 for the six months ended March 31, 2023, representing a increase of approximately $1,414,000 in the net cash outflow in
operating activities. The increase in net cash used in operating activities was primarily due to the following major working capital
changes:
(1) |
Change
in accounts receivable resulted in a cash inflow of $724,706 for the six months ended March 31, 2024 compared to a cash inflow of
$281,612 for the same period of 2023, which led to an approximately $443,000 increase in net cash inflow in operating activities. |
(2) |
Change
in deposits and prepayment resulted in a cash outflow of $20,233 for the six months ended March 31, 2024 compared to a cash outflow
of $64,424 for the same period of 2023, which led to an approximately $44,000 decrease in net cash outflow in operating activities. |
(3) |
Change
in contract assets resulted in a cash inflow of $94,029 for the six months ended March 31, 2024 compared to a cash outflow of $94,320
for the same period of 2023, which led to an approximately $188,000 increase in net cash inflow in operating activities. |
(4) |
Change
in accounts payable resulted in a cash outflow of $2,080,638 for the six months ended March 31, 2024 compared to a cash inflow of
$412,926 for the same period of 2023, which led to an approximately $2,494,000 increase in net cash outflow in operating activities. |
(5) |
Change
in accounts payable – related parties resulted in a cash inflow of $261,770 for the six months ended March 31, 2024 compared
to a cash inflow of $133,604 for the same period of 2023, which led to an approximately $128,000 decrease in net cash inflow in operating
activities. |
(6) |
Change
in other payables and accrued liabilities resulted in a cash outflow of $102,382 for the six months ended March 31, 2024 compared
to a cash inflow of $34,538 for the same period of 2023, which led to an approximately $137,000 increase in net cash outflow in operating
activities. |
(7) |
Net
income of $ 898,795 in the six months ended March 31, 2024 compared net income of $450,808 to the same period of 2023, which led
to an approximately $448,000 increase in net cash inflow in operating activities. |
Investing
Activities
For
the years ended September 30, 2022, 2023, and for the six months ended March 31, 2024, our cash outflow used in investing activities was principally derived from the purchases
of fixtures, furniture and equipment.
Financing
Activities
For the year
ended September 30, 2022, our cash used in financing activities was principally for cash payment of dividends. For the year ended September
30, 2023 our cash used in financing activities was principally for cash payment for the offering expenses and dividend.
For
the six months ended March 31, 2024, our net cash provided by financing activities was principally derived from the proceeds from
the issuance of Ordinary Shares, net of issuance cost, of $5,379,500 and net off with the payment of offering costs of $1,756,440
and upfront payment for services to bring in external financing of $897,436. For the six months ended March 31, 2023 our cash used
in financing activities was principally for cash payment for the offering expenses.
The
Company believes that, taking into consideration the financial resources presently available, including the current levels of cash and
cash flows from operations, our cash and cash equivalent will be sufficient to meet its anticipated cash needs for at least the next
twelve months from the date of this prospectus.
Capital
Expenditures
The
Company did not incur any significant capital expenditures for the years ended September 30, 2022 and 2023.
For
the six months ended March 31, 2024, we incurred capital expenditures of $473,409 primarily related to purchase of warehouse
equipment and accounting system.
Off-Balance
Sheet Arrangements
For
the year ended September 2022, the Company was required to provide a bank guarantee to IATA in favor of its associated airlines
to secure the purchases of cargo spaces. IATA shall have the right from time to time by giving notice in writing to require us to increase
the amount of guarantee if the cargo spaces purchased by us were greater than the existing guaranteed sum. Bank guarantees are provided
by the principal bank of the Company, which in return required a personal guarantee from a director of the Company and collateral such
as mortgage over a property of the director to be pledged in favor of the bank. For the year ended September 30, 2023, the bank guarantee
requirement has been released and the Company is required to provide bank deposits directly to the associated airlines of IATA to secure
the purchases of cargo spaces. As of September 30, 2022 and 2023 and March 31, 2024, a bank provided guarantee of $232,051, nil and nil, respectively, for covering the performance of obligations of the Company.
Except
the disclosures mentioned above, we have no off-balance sheet arrangements, including arrangements that would affect its liquidity, capital
resources, market risk support, credit risk support, or other benefits.
Contractual
Obligations
The
following tables summarized the contractual obligations of the Company as of March 31, 2023:
| |
Payments
Due by Period | |
| |
Less
than 1 year | | |
1
to 3 years | | |
3
to 5 years | | |
More
than 5 years | | |
Total | |
| |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | |
Contractual
Obligations: | |
| | | |
| | | |
| | | |
| | | |
| | |
Operating
lease obligation | |
| 16,667 | | |
| - | | |
| - | | |
| - | | |
| 16,667 | |
Total
contractual obligation | |
| 16,667 | | |
| - | | |
| - | | |
| - | | |
| 16,667 | |
The
following tables summarized the contractual obligations of the Company as of March 31, 2024:
| |
Payments Due by Period | |
| |
Less than 1 year | | |
1 to 3 years | | |
3 to 5 years | | |
More than 5 years | | |
Total | |
| |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | |
Contractual Obligations: | |
| | | |
| | | |
| | | |
| | | |
| | |
Operating lease obligation | |
| 43,076 | | |
| 61,027 | | |
| - | | |
| - | | |
| 104,103 | |
Total contractual obligation | |
| 43,076 | | |
| 61,027 | | |
| - | | |
| - | | |
| 104,103 | |
As
of March 31, 2023 and 2024, we did not have any capital expenditure commitment.
Critical
Accounting Policies and Estimates
Our
significant accounting policies and their effect on our financial condition and results of operations are fully disclosed in our consolidated
financial statements included elsewhere in this prospectus. We have prepared our consolidated financial statements in conformity with
U.S. GAAP, which requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial
statements and accompanying notes. These estimates are prepared using our best judgment, after considering past and current events and
economic conditions. While management believes the factors evaluated provide a meaningful basis for establishing and applying sound accounting
policies, management cannot guarantee that the estimates will always be consistent with actual results. In addition, certain information
relied upon by us in preparing such estimates includes internally generated financial and operating information and external market information.
Actual results may differ from these estimates.
We
consider an accounting estimate to be critical if: (1) it requires us to make assumptions because the information was not available at
the time or it includes matters that were highly uncertain at the time we were making our estimate and (2) changes in the estimate
could have a material impact on our financial condition or results of operations. Despite the fact that the management determines there
are no critical accounting estimates, the most significant estimates relate to allowance for credit losses, for which we are required
to estimate the collectability of accounts receivable. The estimates were based on a number of factors including historical loss rates
and expectations of future conditions, and other factors that may affect our ability to collect from customers.
Quantitative
and Qualitative Disclosure About Market Risk
Credit
Risk
On
October 1, 2020, the Company adopted ASC 326. The Company estimates expected credit losses over the contractual period in which the Company
is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the
Company. Assets that potentially subject the Company to a significant concentration of credit risk primarily consist of cash, accounts
receivable, deposits and contract assets. The Company has designed their credit policies with an objective
to minimize their exposure to credit risk.
Our
exposure to credit risk, which will cause a financial loss to us due to failure to discharge an obligation by the counterparties, relates
primarily to our bank deposits (including our own cash at banks), accounts receivable, deposits and contract assets. We consider the maximum exposure to credit risk equals to the carrying amount of these financial assets in the consolidated
statement of financial position. As of March 31 2024, the cash balance of $2,549,766 was substantially maintained at financial institutions
in Hong Kong.
We
believe that there is no significant credit risk associated with cash, which was held by reputable financial institutions in the jurisdictions
where the Company and its subsidiaries are located.
Credit
risks associated with account receivables and contract assets are typically accounted for by creating an allowance for expected credit
losses. Credit risks are mitigated by performing ongoing credit evaluations of customers’ financial condition. We have adopted
a credit policy of dealing with creditworthy counterparties to mitigate the credit risk from defaults. We estimate the allowance balance
using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable
and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments
to historical loss information are made for differences in current risk characteristics.
Foreign
Currency Risk
We
are a global provider of integrated cross-border logistics services and air freight forwarding services and our functional currency
is the Hong Kong dollars. Most of our transactions during the periods presented in this prospectus are denominated in Hong Kong
dollars, Australian dollars and New Zealand dollars. Historically, our principal exposure to foreign currency fluctuations is mainly
with respect to our expenses incurred denominated in Australian dollars and New Zealand dollars. For the years ended September 30,
2022 and 2023 and for the six months ended March 31, 2024, we incurred approximately 47.7%, 54.3% and 58.1% of
our cost of revenue, respectively, denominated in foreign currencies for customs clearance fees and local courier expenses. We do
not use currency exchange contract to reduce the risk of adverse foreign currency movements, but we believe that our exposure from
foreign currency fluctuations is unlikely to be material. Foreign currency fluctuations had a slightly positive impact on net income
for the years ended September 30, 2022 and 2023 and for the six months ended March 31, 2023, and a negative impact on net income for the six months ended March 31,
2024. For the years ended September 30, 2022 and 2023, the foreign exchange gains were $72,974 and 118,508, respectively. For
the six months ended March 31, 2023 and 2024, the foreign exchange gains was $71,299 and the foreign exchange loss was $142,194,
respectively.
Liquidity
Risk
Liquidity
risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as
possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Company’s reputation.
Typically,
the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the
servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted,
such as natural disasters.
BUSINESS
Our
Mission
We
are an emerging e-commerce logistics provider providing end-to-end logistics solution in Hong Kong, Australia, and New Zealand. Our mission
is to combine our experience, knowledge, and network with flexibility and agility to provide a one-stop logistics solution to customers
and enterprises.
Overview
We
are a holding company incorporated in the Cayman Islands with operations conducted by our operating subsidiary in Hong Kong, Globavend
HK. Since June 2023, we have established our principal executive office in Perth, Australia.
Founded
in 2016, we are emerging e-commerce logistics provider providing end-to-end logistics solutions in Hong Kong, Australia, and New
Zealand. Our business spans Hong Kong and four cities in Australia and in New Zealand through our own business presence and the presence
of our service providers. Our customers are primarily enterprise customers, being e-commerce merchants or operators of e-commerce platforms,
providing business-to-consumer (B2C) transactions.
As
an e-commerce logistics provider, we provide integrated cross-border logistics services from Hong Kong to Australia and New Zealand,
where we provide customers with a one-stop solution, from parcel consolidation to air freight forwarding, customs clearance, on-carriage
parcel transportation, and delivery. We rely on our own proprietary all-in-one shipping solution, which has been or can be connected
to the customer’s own IT systems (such as enterprise resource planning (ERP) systems, customer relationship management (CRM) systems,
booking management systems, or point-of-sale (POS) systems) on one end and the transportation management systems (TMS) of our ground
transportation service providers on the other end, to facilitate effective logistics management.
Other
than integrated cross-border logistics services, we also provide fragmented logistics services, which typically include freight forwarding
services, to customers and enterprises at their own choice.
Our
Competitive Strengths
We
believe the following competitive strengths differentiate us from our competitors:
We
are an IATA-Accredited Cargo Agent
We
are trusted provider of air freight forwarding and related logistics services. Our reputation and reliability have been recognized by
the IATA as an accredited cargo agent. IATA is the trade association for the world’s airlines, having over 300 member airlines
comprising 83% of total air traffic. We were admitted as an IATA-accredited cargo agent in September 2022.
Being
an IATA-accredited cargo agent signifies that we are competent, both financially and professionally, as an air freight forwarder.
We are also entitled to use the Cargo Accounts Settlement System (CASS) maintained by IATA to make payments for air freight charges to
multiple air freight carriers, which greatly reduces operational costs and optimizes operational flexibility.
We
Have a Stable Business Relationship with Air Freight Carriers, Which Enhances Our Competitiveness in Our Business
We
have established long-standing partnerships with international air freight carriers, with two of our top five suppliers for the years
ended September 30, 2022 and 2023 being headquartered in Australia. Our business relationships with these air freight carriers have spanned
over years, and we have maintained stable and cooperative relationships with them.
To
ensure the provision of reliable and efficient integrated cross-border logistics services and air freight forwarding services, we have
also entered into block space agreements with various air freight carriers. These block space agreements allow us to secure air cargo
space primarily for our own deployment. By entering into block space agreements, we have the competitive advantage over our competitors
in securing cargo spaces, particularly during peak seasons with high air freight demands. These block space agreements are terminable
by either party on notice, without incurring penalty. As of March 31, 2024, we had one block space agreement with an air freight
carrier, namely, Qantas Airways Limited. Apart from block space agreements, we can still source air cargo space from air freight carriers
without entering into any block space agreements in view of our stable relationship with them at market rates (as opposed to predetermined
rates under the block space agreements).
Our
strong relationships with our partnering air freight carriers and the block space agreements provide us with greater flexibility in meeting
the integrated cross-border logistics needs and air freight forwarding needs of our customers and thereby enhancing our competitiveness
in the e-commerce logistics industry. It enables us to secure cost-effective cargo space while ensuring timely delivery of goods to destinations.
We
Have Established a Strong Presence in Australia and New Zealand
Our
integrated cross-border logistics services and air freight forwarding services are primarily operated for direct injection of parcels
and cargos into Australia and New Zealand. Over the years, we have established close relationships with the local ground transportation
service providers in Australia and New Zealand, who are mainly government-owned enterprises. Our affinity with the local ground transportation
service providers has been enhanced with the integration of our proprietary all-in-one shipping solution into their Transportation Management
Systems (TMS).
We
leverage upon a strong established network created by our local ground transportation service providers to reinforce our presence in
Australia and New Zealand.
We
Offer Cost-Efficient, Customizable, One-Stop, Integrated Cross-Border Logistics Services and Air Freight Forwarding Services to Accommodate
Our Customers’ Various Logistics Needs
We
are a trusted provider of integrated cross-border logistics services, air freight forwarding, and related logistic services, catering
to the diverse and evolving needs of our customers. We are committed to offering cost-efficient, one-stop solutions that cover the entire
logistic spectrum, enabling our customers to focus on their core business operation while leaving their logistics needs to us. Our extensive
network of partnerships and collaborations with air freight carriers, customs clearance companies, ground transportation companies, and
delivery service providers allow us to provide a seamless, hassle-free experience to our customers. Our logistics services are highly
customizable, where customers can choose to engage our one-stop, integrated cross-border logistics services which provide hassle-free
services from parcel consolidation to delivery, or to choose our logistics services on fragmented basis, where customers may choose any
segment of our logistics services along the logistics supply chain.
We
are also able to achieve a competitive pricing in the provisions of our logistics services. For instance, we have purchased cargo space
from one of the leading major air freight carriers in the Oceania region and developed a stable business relationship with one of the
largest delivery service providers in Australia for over three years, providing for greater certainty of pricing. At Globavend HK, we
understand the importance of optimizing transportation processes to reduce costs and minimize transit times. We cater to the needs of
a range of customers, including leading e-commerce platforms in Hong Kong or e-commerce merchants of beauty products and technology accessories.
Given our stable relationships with our suppliers, coupled with our extensive network of partnerships, we have been able to maintain
our status as one of the trusted freight forwarding and related logistics service providers for many of our major customers.
Our
Proprietary All-in-One Shipping Solution Provide Operational Efficiency and Facilitate Effective Logistics Management
We
have internally developed our own proprietary all-in-one shipping solution, which was modified by us internally on a shipping software
purchased by us in 2019. Our proprietary all-in-one shipping solution has been or can be connected to the customer’s own IT systems
(such as enterprise resource planning (ERP) systems, customer relationship management (CRM) systems, booking management systems, or point-of-sale
(POS) systems) on one end and the transportation management systems (TMS) of our ground transportation service providers on the other
end, to facilitate effective logistics management. With our all-in-one shipping solution, booking instructions and delivery instructions
can be generated automatically without any manual inputs, which significantly reduce shipment errors and enhance logistics efficiency,
enabling us to provide efficient and seamless service to our customers.
Under
our all-in-one shipping solution, a unique tracking number will be automatically generated and assigned to each and every package
once a booking instruction is made under the booking management function of the all-in-one shipping solution (which receives package
information from the customer’s own IT systems). Our all-in-one shipping solution will gather the package information (such as
the shipper’s details and destination information), which will, in turn, transmit the same to our ground transportation service
providers and give delivery shipping and delivery instructions to them accordingly.
Our
all-in-one shipping solution also allows a high degree of customization and can be integrated into a customer’s IT system with
minimal costs. This enables us to meet the unique requirements of the customers and provide a competitive edge in the industry.
The
reliability of our all-in-one shipping solution, and as an e-commerce logistics provider has been recognized internationally. We are
one of the 1,086 carriers recognized by AfterShip, an established post-purchase platform providing cross-platform and cross-carrier e-commerce
shipping tracking services, where shipments made with us can be tracked on the AfterShip tracking system.
With
the assistance of all-in-one shipping solution, we believe that we are well-positioned to meet the needs of our customers, which comprise
mostly of e-commerce platforms or e-commerce merchants in Hong Kong, in providing business-to-consumer (B2C) services. Our all-in-one
shipping solution will continue to play a critical role in our business.
Our
Management and Staff Have Extensive Experience and In-Depth Industry Knowledge
Our
management possesses extensive experience, in-depth knowledge, and expertise in the freight forwarding and logistics industry. With such
experience and expertise, our management is able to keep abreast of the latest developments in the market and to maintain a close
relationship with our partners and service providers, including air freight carriers.
In
particular, Mr. Wai Yiu Yau, our founder, chief executive officer, and chairman of the board, has over 15 years of experience in the
logistics industry and has played a key management and leadership role in our development. Prior to founding Globavend HK, he worked
at a leading worldwide logistics company and was responsible for its daily logistics operations in the Asia-Pacific region. His qualifications
and leadership were essential in formulating our business strategies, and his technical know-how and industry knowledge acquired and
accumulated over the years are essential in keeping us ahead of our competition and securing new business opportunities.
As
of March 31, 2024 and the date of this prospectus, we have seven employees, many of whom have previously worked in the logistics
industry. We believe that the industry expertise and in-depth knowledge of e-commerce logistics, international freight forwarding, and
related logistics services of our employees are essential to our success. For instance, if a customer requires to transport some of its
goods to a particular destination within a specified timeframe with a view to minimize its costs, our team will promptly contact our
suppliers to source the most competitive rates and consequently advise the customer on the various available services that can meet its
specific needs.
We
believe that our success over the years is a direct result of our experienced team of professionals, including our management and employees,
who have been dedicated to providing high-quality freight services to our customers.
Our
Strategies
We
intend to pursue the following strategies to further expand our business:
Enhance
Our Business Presence in Hong Kong, Australia and New Zealand
According
to Ti Logistics, it is expected that the e-commerce logistics market of Australia will grow by 9.9% year-on-year (y-o-y) in
2023 to US$5,957m (equivalent to €5,837m), and to US$9,616m (equivalent to €9,424m) in 2027, representing a 22-27 Compound
Annual Growth Rate (CAGR) of 12.2%. Please refer to “Industry and Market Data – The e-commerce industry – Market
forecast of the e-commerce logistics market” of this prospectus. According to another industry report published by Australia
Post, Australians spent a record of US$552 billion (equivalent to A$353 billion) in retail goods in 2022, representing an increase of
9.2% when compared with 2021. Australia Post also predicts that retail trade in Australia will continue with a rising trend of 3% each
year and by 2033, around one in three of every dollar will be spent online.
Given
the strong and increasing demands of e-commerce in Australia, we expect that the demand for e-commerce logistics will be trending as
well. As such, we plan to tap into the growth of the e-commerce logistics market in Australia by further expanding our logistics network
and business presence in Australia and New Zealand, so as to improve overall utilization through economies of scale, increase the level
of integration across our logistics networks, and improve efficiencies through more intelligent decision-making. Currently, our logistics
network only covers four cities in Australia. As of September 30, 2023, we had seven employees, all of whom were stationed in Hong Kong.
To align with our expansion strategy, we established our principal executive office in Perth, Australia, in June 2023. Mr. Wai Yiu Yau,
our chief executive officer, has been stationed in Perth, Australia since then. As of the date of this prospectus, we have seven employees,
six of whom based in Hong Kong and one of whom based in Australia. As part of our expansion plan, we intend to set up new
warehouses in Sydney, Melbourne and Perth, Australia as well as in New Zealand and to hire additional employees stationed in those cities
to manage and operate those warehouses. It is expected that an additional six employees will be recruited for each new warehouse
to be set up by us.
Currently,
we do not have our own ground transportation team in Hong Kong and a vast majority of our customers deliver the parcels to our warehouse
for further processing after booking instructions have been made with us. To enhance our business presence in Hong Kong, we intend to
set up our own ground transportation service team and customs clearance service team or to pursue acquisitions, investments, joint ventures,
or partnerships with them. To set up our own ground transportation service team and customs clearance service team, we expect that ten
additional employees would need to be recruited for the ground transportation service team and six additional employees will be
recruited for the customs clearance service team, all of whom will be stationed in Hong Kong.
We
will continue to strengthen our logistics network and infrastructure by strategically accessing advantageous geographical locations.
We plan to broaden and deepen our logistics networks’ reach to penetrate further into cities in Australia and New Zealand. We will
also continue to adopt an open mind set in collaborating with industry participants and our service providers and fully utilize their
resources and operational expertise to realize synergies.
Enhance
the Use of Information Technology into Intelligent Delivery and Collection Solutions
To
differentiate ourselves from our competitors, we plan to enhance our quality of service with the use of information technology. We intend
to develop our business and service capabilities by developing intelligent delivery and collection services, which include installation
of intelligent parcel pickup, collection, and drop-off facilities, so as to expand our parcel collection network to meet the increasing
needs and growing demands of e-commerce platforms, merchants, and shoppers. According to Fortune Business Insights, a worldwide market
research firm, the market size of smart parcel lockers was valued at US$806.6 million in 2022 and is projected to grow from US$902.6
million in 2023 to US$2,073.40 million by 2030.
We
aim to bring in and develop the technology of intelligent delivery and collection services to Australia and New Zealand. With the implementation
of intelligent delivery and collection solutions, we can expand our service network geographically, increase our service capabilities,
and provide pickup, collection, and drop-off services 24 hours a day, seven days a week. We aim to achieve this by developing intelligent
delivery and collection solutions internally, by entering into strategic alliances with appropriate service providers, or by pursuing
acquisitions, investments, joint ventures, or partnerships with service providers.
Expand
Our Logistics Services into Different Verticals of the Logistics Supply Chain
Currently,
we rely on our business partners, including air freight carriers, customs clearance companies, ground transportation companies, and local
delivery service providers, to implement our integrated cross-border logistics services and air freight forwarding services to our customers.
Furthermore, the scope of our integrated cross-border logistics services currently does not cover pre-carriage parcel pick up
and most of our business customers deliver the parcels to our warehouse directly. To enhance operational efficiency and quality and to
achieve economy of scale, we aim to further expand our business into different verticals of the logistics supply chain. We intend to
achieve this by setting up our own ground transportation service team and customs clearance service team or to pursue acquisitions, investments,
joint ventures, or partnerships with them. We believe that such business expansion can achieve a better economy of scale, improve our
profit margins, and increase our competitiveness as a whole.
Upgrade
Our Warehousing Facilities
We
intend to upgrade our warehousing facilities with a view to provide an array of value-added logistics services to our customers. We expect
our warehousing facilities and our related logistic services provided to our customers can be improved by installing various systems,
such as automated temperature and humidity control systems, anti-theft systems, and monitoring systems. Further, we also plan to implement
an automated intelligent system at the warehousing facilities to improve its efficiency and capacity to handle our customers’ rising
demands. By implementing and upgrading the systems, we believe that it would significantly strengthen our ability to handle large quantities
of goods within tight schedules and minimize the chance of error. With the new systems, we would be able to offer our customers a wider
range of value-added services, which would increase our competitive edge in our integrated, all-in-one, cross-border logistics services
and the air freight forwarding business, expanding our customer base and encouraging returning customers.
Pursue
Strategic Alliances and Selecting Acquisition Opportunities
We
aim to selectively form additional strategic alliances with air freight carriers, overseas logistics companies, and other partners that
bring synergies with our business. We also plan to selectively pursue acquisitions, investments, joint ventures, and partnerships that
are complementary to our business and operations. We will continue to work with domestic and international business partners or service
providers to grow our global coverage and broaden our service offerings in international markets. We plan to further penetrate our existing
markets by expanding our service offerings; enhancing our all-in-one, integrated cross-border logistics services; and expanding into
other countries and regions.
Further
Enhance Our Sales and Marketing Effort Using “Big Data” and Additional Sales Personnel
We
recognize the important of maintaining a stable business relationship with our existing customers. To achieve this, we plan to enhance
our sales and marketing efforts through various initiatives. As part of our strategy, we plan to improve communication with our existing
customers to keep abreast of the latest market trends and developments. This would allow us to devise business and marketing strategies
that are in line with market demands.
In
the course of our business, we have been able to obtain delivery information and purchase habitat information of e-commerce shoppers
and customers. We plan to leverage upon such “big data” and generate statistical data for our internal analysis and boost
up our sales by marketing our services to targeted shippers and customers in the appropriate markets or geographical locations with high
online shopping demands. We also aim to offer referral programs to existing customers, as we recognize the importance of diversifying
our existing customer base.
To
support the expansion of our business, we also plan to recruit additional personnel comprising of staff and managers who are experienced
in the logistics services to support our operation. In addition, we also aim to recruit sales and marketing personnel who have e-commerce
knowledge and related customer base to enhance our sales and marketing networks.
With
the implementation of the above strategy, we believe that we are able to strengthen our customer base, on the one hand, and further diversify
our customer base, on the other hand, to reinforce our competitive edge.
Our
Services and Business Model
As
an e-commerce logistics provider, we formulate and implement integrated, end-to-end, cross-border logistics solutions for our customers
with the provision of air freight forwarding services and related logistics services as our principal business.
Our
business model principally involves the provision of (i) integrated cross-border logistics services, which include air freight forwarding
services offered as an integral part thereof; and (ii) air freight forwarding services, offered as a modularized logistics service segmented
from our integrated cross-border logistics services.
Our
logistics network covers Hong Kong and four cities in Australia, namely Sydney, Melbourne, Brisbane, and Perth, as well as New Zealand.
The
chart below shows the coverage of our logistics network.
Integrated
Cross-Border Logistics Services
Our
integrated cross-border logistics services is our dominant business segment, which involve order processing, parcel consolidation, cross-border
transportation (primarily by way of air freight), and air freight forwarding, followed by ground transportation and delivery at destination
cities, together with other value-added services. While traditional logistics services providers typically provide fragmented logistics
services and require customers to coordinate with various service providers, we, as an integrated cross-border logistics services provider,
carry out the coordination with different players in the logistics value chain, including warehousing, customs clearance, and air freight
or ground transportation services. This has effectively reduced the lead time and hassle and greatly improved the efficiency in fulfilling
service orders.
As
an integral part of our integrated cross-border logistic services, we have also developed our own proprietary all-in-one shipping solution,
which was modified by us internally on a shipping software purchased by us in 2019. Our proprietary all-in-one shipping solution has
been or can be connected to the internal sales or booking systems of customers, as well as the carrier management systems of the ground
transportation carriers, to facilitate effective logistics management, the details of which are explained. Our services are provided
primarily on a contract logistics basis, under which we provide our enterprise customers with customized integrated logistics services
covering the entire delivery process. Our services start by enterprise customers making booking instructions in their own internal sales
or booking systems, which integrate into our own proprietary all-in-one shipping solution. Upon receipt of booking instructions, our
services start and cover from order origination to the final point of sale or delivery without further efforts or coordination from customers.
This service is a customized one so as to fit a customer’s own business model, representing a seamless combination of order processing,
parcel consolidation, transportation, and delivery.
For
customers engaging our services with agreed price quotations, we can provide one-off or on-demand integrated cross-border logistics services.
Alternatively, customers can also request for our logistics services on a modularized or one-off basis, i.e., they can request for any
segment of our logistics services within the integrated cross-border logistics solution on a stand-alone basis.
As
part of our integrated cross-border logistics services, we also provide related logistics services, which include the provision of supporting
transportation for freight forwarding purpose, storage of consignment, labelling of consignments, other related logistic services for
freight forwarding purpose, freight management services via our proprietary all-in-one shipping solution, and delivery at destination.
We
engage (i) air freight carriers for the provision of cargo spaces, (ii) supporting ground transportation companies for the ground transportation
services in Australia and New Zealand, (iii) customs clearance companies in Australia and New Zealand for the preparation of freight
documentation and arrangement for customs clearance, and (iv) local delivery service providers for dispatching and distributing our customers’
goods to their designated destination in Australia and New Zealand.
Our
integrated cross-border logistics services, together with our proprietary all-in-one shipping solution, enable us to provide efficient
and customer-oriented services. This has resulted in our customers continuously engaging us for one-stop air freight forwarding services
and comprehensive logistic services, allowing us to gradually build our customer base.
Air
Freight Forwarding Services
In
addition to our integrated cross-border logistics services, we also offer air freight forwarding services to customers as segregated
and modularized logistics services to utilize the cargo spaces we have and widen our revenue stream.
Business
Operation Flow
Set
out below is a flow chart summarizing the usual workflow of our integrated cross-border logistics services business.
Booking
Instructions |
|
Parcel
Drop-Off at Our Warehouse |
|
Parcel
Consolidation and Export Customs Clearance at Warehouse |
Business
Customers |
|
Business
Customers |
|
Internal
Staff |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On-Carriage
to Final Destination |
|
Import
Customs Clearance and Parcel Deconsolidation at Warehouse |
|
Air
Freight Forwarding |
Ground
Transportation Service Providers |
|
Customs
Clearance
Companies |
|
Air
Freight
Carriers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Destination |
|
|
|
|
Customers |
|
|
|
|
|
(1) |
Receive
Booking Instructions |
We
receive booking instructions from our customers primarily through the booking management function in our all-in-one shipping solution.
For customers whose IT systems are not connected to our all-in-one shipping solution, they can place booking instructions with us through
other channels, including telephones, emails and our website. Upon receipt of booking instructions from our customers, our all-in-one
shipping solution will select the appropriate local delivery service provider in Australia and New Zealand based on the destination city
and will generate a unique tracking number and assign it to the parcel concerned. The customer can then print out the thermal
shipping label and adhere it to the parcel. For details of our all-in-one shipping solution, please refer to “Business –
Information Technology Infrastructure” below.
Since
the booking management function in our all-in-one shipping solution has been customized to integrate into a customer’s own IT systems,
the booking management function of our all-in-one shipping solution is able to obtain all essential details of each and every booking,
including the shipper information, recipient information, type of products, weight, and dimensions. Customers may also provide specific
instructions or requirements for the handling of their packages, such as fragile materials handling. These instructions are transmitted
automatically to our ground transport service providers through the Transport Management System of our all-in-one shipping solution.
For
customers using our integrated cross-border logistics services, we will provide our quotation to the customers prior to or when a booking
instruction is made with us. Our pricing is primarily charged by way of the weight of the consignments after taking into account of a
number of factors, including the dimensions and volume of the consignments, the services required, and any special care or delivery instructions.
For customers using our air freight forwarding services, we will provide our rate lists setting out our charges from time to time. As
such, it is not necessary for us to provide any quotations to customers prior to the acceptance of booking instructions. For details,
please refer to “Business – Pricing Strategy” below.
|
(2) |
Pre-Carriage
to Warehouse |
Upon
receipt of booking instruction, customers will adhere the thermal shipping label to the parcels. A vast majority of our customers deliver
the parcels to our warehouse for further processing. Other customers may obtain quotations from us for the pre-carriage parcel pick up,
which will be performed by ground transportation companies engaged by us.
|
(3) |
Parcel
Consolidation and Customs Clearance |
Once
parcels reach our warehouse, we will perform sorting of the parcel based on their destination cities and consolidate all parcels having
the same destination city by repacking the same into carton boxes. Since air freight carriers charge us according to the block pallet
space that we occupy, the parcel consolidation process is critical as a cost-saving measure for us. After parcel consolidation, our internal
staff will also submit the necessary documentation to the Hong Kong Customs and Excise Department for clearance. We will monitor the
clearance process continuously and work to resolve any issues or delays that may arise.
To
comply with aviation security rules promulgated by the International Civil Aviation Organization (the “ICAO”), our cargo
screening service provider, being a Regulated Air Cargo Screening Facility (the “RACSF”) under the ICAO, will arrange to
pick up the consignments at our warehouse and conduct air cargo screening at an off-airport facility. Upon completion of the air cargo
screening, our cargo screening service provider will deliver the consignments to the airport and hand them over to the relevant air freight
carriers in accordance with our instructions.
|
(4) |
Air
Freight Forwarding |
Since
we have entered into a block space agreement with an air freight carrier, we will endeavor to utilize the block space we have been allocated
as much as possible. Our operations department will continue monitoring the usage status and make bookings with other air freight carriers
if the block space allocated to us is insufficient. We will also co-load our block space with other freight forwarders we have if there
is any underused so as to maximize our revenue.
Once
the air freight is confirmed, our RACSF service provider will deliver the consignments to the airport and hand them over to the relevant
air freight carriers.
Once
our consignments are loaded onto the aircraft, we would typically receive a master airway bill from the air freight carrier outlining
the terms and conditions governing the transportation of the consignment.
|
(5) |
Import
Customs Clearance and Parcel Deconsolidation |
Since
our all-in-one shipping solution is connected to the broker’s portal of our customs clearance companies, we will give pre-alert
messages to the customs clearance companies when our consignments are loaded on the aircrafts. The customs clearance companies will then
begin the import customs clearance process. This process includes picking up our consignments from the aircraft upon landing, conducting
a thorough inspection of the consignments, and preparing all relevant documentation for customs clearance so as to ensure that the import
procedures are in order and comply with the laws and regulations in Australia and New Zealand.
|
(6) |
Transportation
and De-consolidation of Consignment |
After
the consignments have been checked and approved by the customs authorities in the destination city, the customs clearance company will
arrange for the consignments to be transported to their own warehouse for de-consolidation purposes. At this point, the overseas customs
clearance company will perform a final quality control check to ensure that every parcel is in good condition.
During
the de-consolidation process, the overseas customs clearance company will segregate the consignments and arrange the consignments by
destination. After this process has been completed, the overseas customs clearance company will subsequently notify our local delivery
service providers in the destination cities.
Following
the completion of the de-consolidation process, our delivery service providers in destination cities take over the responsibility of
transporting the parcels to their respective destinations. The delivery service providers will coordinate with the overseas customs clearance
company to pick up the products from their warehouse.
The
delivery service providers will arrange for their transportation to our customers’ designated destination.
To
ensure the accuracy of the delivery, our customers have already affixed the thermal label containing the unique tracking number generated
by our all-in-one shipping solution to each individual parcel before it was picked up in Hong Kong. This tracking number enables our
delivery service providers to identify the correct destination for each parcel, thereby ensuring that all of our customers’ parcels
are delivered to the intended destinations.
Customers
Our
customers mainly consist of direct customers, who primarily are businesses that operate e-commerce platforms or e-commerce merchants
in Hong Kong.
For
the year ended September 30, 2022, three customers accounted for 19.3%, 16.4%, and 15.7% of our total revenue. For the year ended September
30, 2023, three customers accounted for 21.9%, 18.1%, and 14.2% of our total revenue.
We
do not enter into long-term agreements with our customers, which is in line with industry practice. For customers using our integrated
cross-border logistics services, we will provide our rate lists setting out our charges from time to time. As such, it is not necessary
for us to provide any quotations to customers prior to the acceptance of booking instructions. For customers using our air freight forwarding
on a segmented basis, we will provide our quotation to the customers prior to or when a booking instruction is made with us.
We
generally do not have any specific agreement with our customers on liability for damage of goods during transit, but we maintain insurance
policies to cover such losses.
Suppliers
Our
suppliers include (i) air freight carriers for the provision of cargo spaces, (ii) cargo screening service providers in Hong Kong, (iii)
customs clearance companies in both Australia and New Zealand for the preparation of freight documentation and arrangement for customs
clearance, and (iv) local delivery service providers for dispatching and distributing our customers’ goods to their designated
destinations in Australia and New Zealand.
For
the six months ended March 31, 2024, three major suppliers accounted for 35.9%, and 15.6% and 12.0% of our total purchases. For the six months ended March 31, 2023, four major suppliers accounted for 34.6%, 19.9%, 13.8% and 13.0% of our
total purchases. For
the year ended September 30, 2023, four major suppliers accounted for 33.1%, 23.1%, and 13.4% and 10.9% of our total purchases. For the
year ended September 30, 2022, four major suppliers accounted for 26.2%, 14.7%, 14.6%, and 13.1% of our total purchases.
For
the years ended September 30, 2022 and 2023 and the six months ended March 31, 2023 and 2024, we transacted with 10, 5,
6 and 8 air freight suppliers, respectively, comprising air freight carriers and freight forwarders, for the provision of
cargo spaces, as well as over 55, 43 and 24 suppliers, respectively, for transport and local delivery-related services.
In
particular, we procure cargo spaces directly from air freight carriers under different arrangements, including (i) direct booking, and
(ii) block space arrangements. We are an IATA-accredited cargo agent and entitled to make direct bookings with air freight carriers without
any third-party agent. We generally procure cargo spaces through the block space agreements we entered into with air freight carriers
for a period of time at pre-agreed costs, and we occasionally procure additional cargo spaces from air freight carriers through direct
bookings.
As
part of the services we provide, we also arrange third-party service providers to provide the necessary supporting and ancillary logistics
services, such as customs clearance companies for customs clearance in Australia and New Zealand, cargo screening service providers to
carry out the necessary aviation security measures, and local delivery service providers in destination cities to carry out the last-mile
delivery. Ground transportation companies will also be engaged if customers request for parcel pick-up.
We
purchase cargo space from our suppliers either through (i) direct booking from air freight carriers, or (ii) block space arrangements.
We
purchase air cargo spaces through direct booking with air freight carriers or other freight forwarders on a demand basis, without entering
into any fixed-term agreements. For the years ended September 30, 2022 and 2023, the value of direct bookings for cargo spaces made with
air freight carriers and other freight forwarders amounted to approximately US$12.3 million and US$7.1 million, respectively.
For
direct bookings with air freight carriers, we negotiate with air freight carriers for a fair price to secure the required cargo space
for the consignment. This involves determining the necessary type of aircraft, the volume of cargo space required, and the destination.
With our established relationships with various air freight carriers, we are able to secure satisfactory rates for our consignments.
Furthermore,
we will co-load with other freight forwarders to secure air cargo spaces. This arrangement allows multiple freight forwarders to share
a single air cargo space and split transportation costs. To ensure a cost-effective arrangement is attained, we consider various factors,
such as price terms, schedule of flights, availability of cargo spaces, and the destination, when booking directly with other freight
forwarders.
To
maintain our status as an IATA-accredited cargo agent so as to entitle us to make direct bookings with air freight carriers. As of September
30, 2022 and 2023 and March 31, 2023 and 2024, we maintain bank guarantee of $232,051, nil, $232,051 and nil,
respectively, with IATA.
|
(ii) |
Block
Space Arrangements |
We
have established a block space agreement with an air freight carrier to secure a committed amount of air cargo spaces for a predetermined
period, typically one year, at pre-agreed costs. The agreement is terminable by either party upon 60-days’ notice without any penalty.
We are fully committed to obtaining the agreed volume of air cargo space as specified under the block space agreements. Such block space
agreements typically contain clauses requiring us to make payments to air freight carriers for the agreed volume of cargo spaces, irrespective
of whether the air cargo spaces have been fully utilized, except when the volume of air cargo spaces available for use on the particular
aircraft is less than the agreed volume of cargo space.
During
the years ended September 30, 2022 and 2023 and the six months ended March 31, 2023 and 2024, we paid an aggregate cost of approximately
$1,340,658, $1,219,343, $514,895 and $602,387, respectively, under our block space agreements.
The
following sets forth the salient terms of the block space agreement we enter into with an air freight carrier for procurement of cargo
spaces:
Parties: |
|
(1)
Qantas Airways Limited and (2) Globavend HK |
Term: |
|
Typically
one year. |
Committed
volume of cargo space and rates |
|
Generally
an agreed level of cargo space (in terms of space allocation) for each week for certain flight schedules at predetermined prices. |
Termination |
|
Either
party to the block space agreement may terminate the block space agreement by giving 60 days’
notice in writing to the other party.
Either
Party may immediately terminate the block space agreement by giving notice if:
(a)
the other party breaches any provision of the block space agreement and fails to rectify the breach within 30 days of receiving written
notice requiring it to do so; or
(b)
the other party breaches a material provision of the block space agreement and the breach is not capable of bring remedies. |
Credit
term |
|
Generally
within 14 days after the issuance of the invoice. |
Information
Technology Infrastructure
As
an essential part of our integrated cross-border logistics services, we have developed our own proprietary all-in-one shipping solution,
which was modified by us internally on a shipping software purchased by us in 2019. Our proprietary all-in-one shipping solution has
been or can be connected to the customer’s own IT systems (such as enterprise resource planning (ERP) systems, customer relationship
management (CRM) systems, booking management systems, or point-of-sale (POS) systems) on one end and the transportation management systems
(TMS) of our ground transportation service providers on the other end, to facilitate effective logistics management.
Our
all-in-one shipping solution performs two major functions: (i) a booking management function (BMS), and (ii) a transportation management
function. The booking management function allows a high degree of customization and can be integrated into the customer’s own IT
systems (such as enterprise resource planning (ERP) systems, customer relationship management (CRM) systems, booking management systems,
or point-of-sale (POS) systems) by way of an Application Programming Interface (API). The booking management function enables booking
instructions to be given, whether automatically by retrieving information from customers’ own IT systems or manually by users inputting
the relevant booking management information.
The
booking instruction typically includes the name of the consignee, the delivery address, the product type of the parcel, and its declared
weight.
Our
all-in-one shipping solution system is connected to the transportation management systems (TMS) of two of our major local delivery service
providers. For delivery service provider A, a unique prefix identifying our Company and a range of tracking numbers will
be allocated to us from time to time. Once a booking instruction has been received, our system will generate a unique tracking
number to the parcel, comprising of the unique prefix and a unique tracking number selected from the pre-assigned range of tracking
numbers. Customers can then generate a thermal label from our all-in-one shipping solution and adhere it to the parcel. For delivery
service provider B, once a booking instruction has been received, our all-in-one shipping solution system will give such instruction
to the transportation management systems (TMS) through the application programming interface (API). An instant response, being a
unique tracking number generated by its transportation management systems (TMS), will be given to our system. Customers can then generate
a thermal label from our system and adhere it to the parcel. Our all-in-one shipping solution is also connected to the broker’s
portal of our customs clearance companies through the application programming interface (API) opened to us. As such, the shipping instructions
will be transmitted to our customs clearance companies through its broker’s portal for customs clearance and onward processing.
The
charts below show the logical flow of our all-in-one shipping solution:
Chart
1: Logical flow of the connections between customers, customs clearance company, and local delivery service provider A
Chart
2: Logical flow of the connections between customers, customs clearance company, and local delivery service provider B
Our
all-in-one shipping solution is also connected to cross-carrier shipping tracking platforms such that shippers and customers can
monitor the status of their parcels in real time.
As
our all-in-one shipping solution operates automatically it significantly reduces shipment errors and enhances logistics efficiency.
In
addition, our all-in-one shipping solution will also generate a shipping label for each and every package with a unique tracking
number imprinted on it. Enterprise customers can handily print out the thermal labels so generated and adhere it to packages.
Our
all-in-one shipping solution can be integrated into customer’s IT systems, typically by way of application programming interface
(API), with minimal costs. This also saves significant investment costs on part of the enterprise customers in developing their own shipment
management systems.
The
reliability of our all-in-one shipping solution as an e-commerce logistics provider has been recognized internationally. We are one of
the carriers recognized by AfterShip, an established post-purchase platform providing cross-platform and cross-carrier e-commerce shipping
tracking services, where shipments made with us can be tracked on the AfterShip tracking system.
With
the integration of our all-in-one shipping solution into the customer’s own IT systems, we have been able to build a loyal customer
base.
For
the years ended September 30, 2022 and 2023 and the six months ended March 31, 2024, we did not experience any failure in our all-in-one shipping solution that caused
material disruptions to our operations. We are, however, susceptible to risks relating to failure of our information technology system.
For details regarding such risks, refer to “Item 3. Key Information – D. Risk Factors — Risks Related to Our Business
and Industry —Our business is dependent on information technology” and “Item 3. Key Information – D. Risk
Factors — Risks Related to Our Business and Industry —Our business is subject to cybersecurity risks. A cyberattack may disrupt
our operations and compromise the personal data of our customers.” set forth in our most recent Annual Report on Form 20-F
for the fiscal year ended September 30, 2023 on file with the SEC, which is incorporated by reference into this prospectus.
Sales
and Marketing
We
have been able to maintain a stable and harmonious business relationship with our existing customers, who are mainly e-commerce merchants,
or businesses operating e-commerce platforms in Hong Kong. As a one-stop service provider, we offer door-to-door international delivery
services in one package, which eliminates the need for our customers to coordinate with multiple service providers. Our directors are
capable of providing relevant market information and advice on our capability to offer international logistics solutions. Our directors
believe that our track record of providing efficient ways of delivering and handling our customers’ goods has helped us to build
a loyal customer base. Our proprietary all-in-one shipping solution, which has been or can be incorporated into customers own IT systems,
also helps us to create a close bond with our customers. We believe that customer loyalty is essential to our success, and we strive
to provide high-quality services to maintain our customers’ loyalty. Through our high-quality and efficient services and commitment
to our customers, we have been able to maintain a close relationship with them, who, in turn, make referrals for our freight forwarding
and related logistics services.
In
addition to serving our existing customers, we also conduct outreach to potential customers who have no prior business relationship with
us, as we seek to diversify and expand our customer base. Through our sales and marketing efforts, we target to diversify and expand
our customer base, thereby boosting sales performance and fostering a more diversified customer network. We believe that our experience
in serving e-commerce businesses, combined with our commitment to customer satisfaction, positions us for long-term success in the e-commerce
logistics industry.
Pricing
Strategy
Our
directors are responsible for determining the price for our integrated cross-border logistics services and freight forwarding services.
We adopt a cost-plus approach for our pricing for both lines of businesses. We take into account the following factors in determining
the fees we charge our customers:
|
(i) |
Type
and value of consignment; |
|
|
|
|
(ii) |
Freight
rates charged by our competitors; |
|
|
|
|
(iii) |
Future
business opportunities; |
|
|
|
|
(iv) |
Reputation
of the customer; |
|
|
|
|
(v) |
Costs
of services, including freight charge, fuel charge, security charge, and charges of our service providers; |
|
|
|
|
(vi) |
Level
of acceptance of the current market rates for similar services; and |
|
|
|
|
(vii) |
Weight
of consignment and volume of cargo space required. |
Competition
We
operate in the logistics and freight forwarding industry, which involves the provision of services such as freight transport, freight
forwarding, warehouse management, and distribution. The market we operate in is highly fragmented and can be segmented based on major
industry groups, such as air cargo forwarding services, freight transportation, courier activities, warehousing and storage, and other
logistics services. We understand that the core value of logistics solutions providers lies in their ability to move freight from the
point of origin to the point of consumption within a stipulated time at the most competitive price. The key success factors in the industry
include maintaining reputation, developing a strong and extensive network, having strong capital support, and possessing operational
experience and management capability.
We
face keen competition from numerous competitors operating on different scales in Hong Kong. Management believes that we compete favorably
with our competitors through our competitive strengths, such as well-established partnerships with customers and our service suppliers,
our all-in-one shipping solution system, and a strong capability to provide integrated logistics solutions.
Seasonality
The
demand for certain products transported by us is
influenced by a number of factors, such as weather patterns, national holidays, economic conditions, major product launches, brand promotions,
and many other market factors. Accordingly, comparison of sales and operating results from different periods in any given financial year
may not be relied upon as indicators of our performances, since many of the market factors are unpredictable, and we provide no assurances
that any market trends will continue. Due to these potential fluctuations, we place great importance on maintaining close contact with
our customers to monitor trends and capture market needs effectively.
Insurance
We
believe our insurance coverage is adequate to insure against the risks relating to our operations, given the size and nature of our business.
Our insurance coverage includes, among others, work-related injury insurance for our employees and property all risks insurance for our
office and warehousing facilities. Additionally, we also purchase increased costs of work insurance for business interruption, marine
liability insurance, and money-in-transit insurance covering warehouses and parcels, as well as other liability insurance as needed.
We review our insurance policies from time to time for adequacy in the breadth of coverage.
We
are not liable for any damage or loss to our customers’ goods unless such damage or loss is caused by our negligence. Where we
are liable for the damage or loss to our customers’ goods, claims against us from our customers are covered by the insurance policies
we maintain as described above. Our business is, however, susceptible to risks arising from losses we sustain during the course of our
business operations, and we cannot assure you that the insurance policies we have taken out are always able to cover all losses we sustain.
In the case of an uninsured loss or a loss in excess of insured limits, including those caused by natural disasters and other events
beyond our control, we may be required to pay for losses, damages, and liabilities out of our own funds. For details regarding such risks,
refer to “Item 3. Key Information – D. Risk Factors — Risks Related to Our Business and Industry —Our insurance
coverage may be inadequate to protect us from potential losses” set forth in our most recent Annual Report on Form 20-F for
the fiscal year ended September 30, 2023 on file with the SEC, which is incorporated by reference into this prospectus.
Employees
As
of March 31, 2024 and the date of this prospectus, we have seven full-time employees, six of whom are based in Hong Kong and
one of whom is based in Australia. As of September 30, 2022, Globavend HK employed a total number of nine full-time employees in Hong
Kong. The following table sets out a breakdown of our employees by function:
| |
As
of September
30, 2022 | | |
As
of September
30, 2023 | | |
As
of March
31, 2023 | | |
As
of March
31, 2024 | |
Management | |
| 1 | | |
| 1 | | |
| 1 | | |
| 1 | |
Administration
and human resources | |
| 1 | | |
| 1 | | |
| 1 | | |
| 1 | |
Accounting
and finance | |
| 1 | | |
| 1 | | |
| 1 | | |
| 2 | |
Supply-chain
management | |
| 1 | | |
| 1 | | |
| - | | |
| 1 | |
Warehouse
management (1) | |
| 5 | | |
| 3 | | |
| 2 | | |
| 2 | |
Total | |
| 9 | | |
| 7 | | |
| 5 | | |
| 7 | |
(1) |
Includes
full-time employees but excludes part-time employees. |
We
believe Globavend HK maintains a good working relationship with its employees, and it has not experienced any significant problems
with our employees or any disruption to our operations due to labor disputes, nor have we experienced any material difficulties in
the recruitment and retention of experienced core staff or skilled personnel during the years ended September 30, 2022 and 2023 and
the six months ended March 31, 2023 and 2024.
Facilities
We
do not own any real property.
During
the years ended September 30, 2022 and 2023 and the six months ended March 31, 2024, we leased the following properties to support our business activities and operations:
No. |
|
Location |
|
Gross
floor area
(sq.m) |
|
Rent |
1. |
|
Room
13, 18/F, Tsuen Wan Industrial Centre, 220-248 Texaco Road, Tsuen Wan, New Territories, Hong Kong(1) |
|
236.16
(approximate) |
|
HK$26,000
per month |
2. |
|
Room
02A, 24/F, Tsuen Wan Industrial Centre, 220-248 Texaco Road, Tsuen Wan, New Territories, Hong Kong(2) |
|
167.22
(approximate) |
|
HK$19,000
per month |
(1) |
Globavend
HK entered into a lease agreement with an independent third party, pursuant to which Globavend HK leased the premises with a lease
term from September 10, 2021 to September 9, 2023, and extended by another lease agreement for a further lease term from September
10, 2023 to September 9, 2026. |
(2) |
Globavend
HK entered into a lease agreement with an independent third party, pursuant to which Globavend HK leased the premises with a lease
term from December 10, 2021 to December 9, 2022. The lease was terminated upon expiry on December 9, 2022. |
Intellectual
Property
As
of the date of this prospectus, we have registered one trademark in Hong Kong, which we consider to be material to our business:
Trademark |
|
Place
of
registration |
|
Trademark
number |
|
Owner |
|
Class |
|
Expiry
date |
|
|
Hong
Kong |
|
306075667 |
|
Globavend
HK |
|
16,
35, 36, 38, 39, 42 |
|
October
5, 2032 |
Licenses
and Regulatory Approvals
A
summary of the laws and regulations applicable to our business and industry is set out in the section headed “Regulation”
in this prospectus. We have obtained all the necessary licenses, permits, and approvals that are material to our business during
the years ended September 30, 2022 and 2023, and up to the date of this prospectus, with details set forth below:
License/Permit/Approval |
|
Holding
Entity |
|
Issuing
Authority |
|
Date
of Grant |
|
Date
of Expiry |
|
Accredited
Cargo Agent |
|
Globavend
HK |
|
International
Air Transport Association |
|
September
18,
2022 |
|
-- |
|
Regulated
Agents |
|
Globavend
HK |
|
Civil
Aviation Department, HKSAR |
|
August
18,
2020 |
|
-- |
|
Legal
Proceedings
We
are currently not a party to any material legal or administrative proceedings. We may from time to time be subject to various legal or
administrative claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding,
regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management’s time
and attention.
REGULATIONS
Regulations
Related to Our Business Operations in Hong Kong
Regulations
Related to Our Freight Forwarding Business
Business
Registration Ordinance (Chapter 310 of the Laws of Hong Kong)
The
Business Registration Ordinance requires every person carrying on any business to make an application to the Commissioner of Inland Revenue
in the prescribed manner for the registration of that business. The Commissioner of Inland Revenue must register each business for which
a business registration application is made and, as soon as practicable after the prescribed business registration fee and levy are paid,
issue a business registration certificate or branch registration certificate for the relevant business or the relevant branch, as the
case may be.
Aviation
Security Ordinance (Chapter 494 of the Laws of Hong Kong)
The
Aviation Security Ordinance is an ordinance that makes provisions for the prevention and suppression of acts of violence against
civil air transport and connected purposes, and constitutes the comprehensive legislation for implementation of the conventions
and agreements on aviation security promulgated by the International Civil Aviation Organization (the “ICAO”). To safeguard
aircraft against acts of unlawful interference, the ICAO has laid its own standards and recommend practice in Annex 17 to the
Convention on International Civil Aviation (the “CICA”) on the security measures required to be implemented by contracting
states. For the security of air cargo to be in line with Annex 17 to the CICA, the Hong Kong Aviation Security Programme, which is enforceable
under the Aviation Security Ordinance, has incorporated the Regulated Agent Regime (the “RAR”) since March 2000. A cargo
handling agent, a freight forwarder or a consignor of air cargo may apply for registration as a regulated agent (“RA”), who
is required to comply with the requirements in respect of an RA in the Hong Kong Aviation Security Programme, in order to prevent the
unauthorized carriage of explosives and incendiary devices in the consignments of cargo intended for carriage by air.
Under
the RAR, an RA is obliged, among other obligations, to ensure that the appropriate security controls acceptable by the Civil Aviation
Department (“CAD”) are properly implemented upon the acceptable of cargo for carriage by air unless the consignment of cargo
is safeguarded against unauthorized interference after its reception and to make best endeavors to protect it from unauthorized interference
until the consignment is accepted by another RA or an airline.
An
RA shall also ensure that a consignment of cargo accepted from a known consignor or another RA is:
|
(a) |
accompanied
by a full description of the contents in the shipping documents (e.g. airway bills, cargo manifests), that the RA’s registration
code or the known consignor’s code on the shipping documents of the consignment is checked; |
|
|
|
|
(b) |
checked
against the description in the shipping documents in respect of the quantity of the cargo tendered and any sign of the package having
been tampered with; |
|
|
|
|
(c) |
declared
as known cargo by checking the annotation of the tendering RA’s registration code or otherwise stated as unknown cargo on shipping
documents in the inter-RA’s handling; and |
|
|
|
|
(d) |
safeguarded
from unauthorized interference after it has been received until accepted by the next RA or an airline, or until loaded on to an aircraft. |
RAs
shall also maintain an orderly documentation and record system. Documents such as airway bills, cargo manifests and relevant instructions
from consignors should be kept for at least 31 days after the consignment is flown.
On
September 1, 2016, the ICAO has introduced a new policy direction to progressively increase the required screening percentage of known
cargoes consigned by existing consignors which have not been approved by the CAD, from 1% to 100% before the deadline imposed by ICAO
(June 30, 2021). From June 2021 onwards, prior to the air cargo being loaded onboard, all registered agents will be required to screen
100% of their cargo tendered by consignors not approved by the CAD. In anticipation of an upsurge in screening demand, a regulated air
cargo screening facilities scheme which enables and regulates air cargo screening at off-airport locations has been formulated. Any entity
which intends to conduct air cargo security screening operations in their premises may apply for acceptance by the CAD to become a regulated
air cargo screening facility (“RACSF”). Each RACSF must have at least two nominated persons for cargo security who have attended
and completed the RACSF training program acceptable to the CAD. The relevant training certificates are valid for a period of three years,
hence, the relevant RACSF should arrange for revalidation of the same by their expiry.
Dangerous
Goods (Consignment by Air) (Safety) Ordinance (Chapter 384 of the Laws of Hong Kong) and Dangerous Goods (Consignment by Air)
(Safety) Regulations (Chapter 384A of the Laws of Hong Kong)
The
Dangerous Goods (Consignment by Air) (Safety) Ordinance (“DGO”) is to control, in the interests of safety, the preparation,
packing, marking, labelling and offering of dangerous goods for carriage by air. Under the DGO, dangerous goods (“Dangerous Goods”)
is defined as any article or substance which is listed in the Technical Instructions for the Safe Transport of Dangerous Goods by Air
(“Technical Instructions”) published by the ICAO and any article or substance not so listed by name but having properties
corresponding to those of one of the general classifications of articles and substances in the Technical Instructions. When offering
or handling Dangerous Goods for air carriage, consignors are required under the DGR to ensure all Dangerous Goods are properly classified,
packed, marked, labelled and documented.
Any
person who consigns Dangerous Goods in contravention of the Dangerous Goods (Consignment By Air) (Safety) Regulations (“DGR”)
commits an offence and on conviction on indictment is liable to a fine of HK$250,000 and imprisonment for two years or on summary conviction
to a fine of HK$50,000 and to imprisonment for one year. Furthermore, where a company commits an offence, every director and every officer
concerned in the management of the company may be convicted of the like offence as specified under the DGO. Those Dangerous Goods and
any packaging for Dangerous Goods may be forfeited.
Additionally,
as required under the DGR, staff of a freight forwarder shall not perform the function of processing Dangerous Goods, processing cargo
(not containing Dangerous Goods) or handling, loading and storage of cargo unless he/she has completed training programmes which fulfill
the requirement under the DGR. Staff who process Dangerous Goods without completing the necessary training programmes commits an offence
and the freight forwarder and such staff each commits an offence and is liable to a fine of HK$25,000 and to imprisonment for six months.
Also, a freight forwarder commits an offence where it did not ensure its staff who process cargo (not containing Dangerous Goods) or
handle, load and store cargo to complete the necessary training programmes and it is liable to a fine of HK$25,000 and to imprisonment
for six months.
International
Conventions - Carriage of Goods by Air
In
relation to carriage of goods by air, the relevant international conventions are the Warsaw Convention for the Unification of Certain
Rules Relating to International Carriage by Air 1929 (the “Warsaw Convention”) and the Montreal Convention for the Unification
of Certain Rules for International Carriage by Air 1999 (the “Montreal Convention”).
The
Warsaw Convention
The
Warsaw Convention was an international convention which regulates liability for international carriage of persons, luggage or goods performed
by aircraft for reward. It was originally signed in 1929 in Warsaw and was amended in 1955 by the Hague Protocol (the “Amended
Warsaw Convention”). Hong Kong still applies the Amended Warsaw Convention to international air carriages with countries that have
adopted the Amended Warsaw Convention but not the Montreal Convention.
The
Montreal Convention and the Carriage by Air Ordinance
The
Montreal Convention was designed to establish worldwide uniformity in liability rules governing air carriage of person, baggage and cargo
for compensation between two countries which are parties to it. Hong Kong ratified the Montreal Convention on 15 December 2006. The Montreal
Convention was put into force in Hong Kong under the Carriage by Air Ordinance (Chapter 500 of the Laws of Hong Kong) (the “CAO”).
The
provisions of the Montreal Convention, as set out in Schedule 1A of the CAO, so far as they relate to the rights and liabilities of carriers,
carriers’ servants and agents, passengers, consignors, consignees and other persons, and subject to the CAO, have the force of
law in relation to any carriage by air to which the Montreal Convention applies, irrespective of the nationality of the aircraft performing
that carriage.
Article
18 of the Montreal Convention determines the extent of the carriers’ liability during carriage of cargoes. Article 18(1) states
that the carrier is liable for damage sustained in the vent of the destruction or loss of, or damage to, cargo upon condition only that
the event which caused the damage so sustained took place during the carriage by air. Article 18(2) provides the following four defences
to the carrier:
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inherent
defect, quality or vice of that cargo; |
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defective
packing of that cargo performed by a person other than the carrier or its servants or agents; |
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(c) |
an
act of war or an armed conflict; and/or |
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an
act of public authority carried out in connection with the entry, exit or transit of the cargo. |
Regulations
Related to Employment and Labor Protection
Employment
Ordinance (Chapter 57 of the Laws of Hong Kong)
The
Employment Ordinance is an ordinance enacted for, among other things, the protection of the wages of employees and the regulation of
the general conditions of employment and employment agencies. Under the Employment Ordinance, an employee is generally entitled to, among
other things, notice of termination of his or her employment contract; payment in lieu of notice; maternity protection in the case of
a pregnant employee; not less than one rest day in every period of seven days; severance payments or long service payments; sickness
allowance; statutory holidays or alternative holidays; and paid annual leave of up to 14 days depending on the period of employment.
Employees’
Compensation Ordinance (Chapter 282 of the Laws of Hong Kong)
The
Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong), or the ECO, is an ordinance enacted for the purpose of
providing for the payment of compensation to employees injured in the course of employment. As stipulated by the ECO, no employer shall
employ any employee in any employment unless there is in force in relation to such employee a policy of insurance issued by an insurer
for an amount not less than the applicable amount specified in the Fourth Schedule of the ECO in respect of the liability of the employer.
According to the Fourth Schedule of the ECO, the insured amount shall be not less than HKD100,000,000 per event if a company has no more
than 200 employees. Any employer who contravenes this requirement commits a criminal offence and is liable on conviction to a fine and
imprisonment. An employer who has taken out an insurance policy under the ECO is required to display a prescribed notice of insurance
in a conspicuous place on each of its premises where any employee is employed.
Minimum
Wage Ordinance (Chapter 608 of the Laws of Hong Kong)
The
Minimum Wage Ordinance provides for a prescribed minimum hourly wage rate (currently at HK$40 per hour) during the wage period for every
employee engaged under a contract of employment under the Employment Ordinance.
Any
provision of the employment contract that purports to extinguish or reduce the right, benefit, or protection conferred on the employee
by the Minimum Wage Ordinance is void.
Mandatory
Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong)
The
Mandatory Provident Fund Schemes Ordinance (“MPFSO”) is an ordinance enacted for the purposes of providing for the establishment
of non-governmental mandatory provident fund schemes (each, a “MPF Scheme”). The MPFSO requires every employer of an employee
of 18 years of age or above but under 65 years of age to take all practical steps to ensure the employee becomes a member of a registered
MPF Scheme. Subject to the minimum and maximum relevant income levels, it is mandatory for both employers and their employees to contribute
5% of the employee’s relevant income to the MPF Scheme. Any employer who contravenes this requirement commits a criminal offense
and is liable on conviction to a fine and imprisonment. As of the date of this prospectus, the Company believes it has made all contributions
required under the MPFSO.
Occupiers
Liability Ordinance (Chapter 314 of the Laws of Hong Kong)
The
Occupiers Liability Ordinance (Chapter 314 of the Laws of Hong Kong) regulates the obligations of a person occupying or having control
of premises on injury resulting to persons or damage caused to goods or other property lawfully on the land. The Occupiers Liability
Ordinance imposes a common duty of care on an occupier of premises to take such care as in all the circumstances of the case is reasonable
to see that the visitors will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier
to be there.
Occupational
Safety and Health Ordinance (Chapter 509 of the Laws of Hong Kong)
The
Occupational Safety and Health Ordinance provides for protection to employees with respect to their safety and health in workplaces.
It applies not only to industrial workplaces but also non-industrial.
Under
the Occupational Safety and Health Ordinance, every employer must, as far as reasonably practicable, ensure the safety and health at
work for all employees by: (a) providing and maintaining plant and systems of work that are safe and without risks to health; (b) making
arrangements for ensuring safety and absence of risks to health in connection with the use, handling, storage or transport of plant or
substances; (c) providing such information, instruction, training and supervision as may be necessary to ensure the safety and health
at work of the employees; (d) as regards any workplace under the employer’s control, (i) maintaining the workplace in a condition
that is safe and without risks to health; and (ii) providing or maintaining means of access to and egress from the workplace that are
safe and without any such risks; and (e) providing and maintaining a working environment for the employees that is safe and without risks
to health. An employer who fails to comply with the above provisions commits an offence and is liable, on summary conviction, to a fine
of HK$3,000,000 and on conviction on indictment, to a fine of HK$10,000,000. Further, an employer who intentionally, knowingly or recklessly
fails to comply with these provisions commits an offence and is liable, on summary conviction, to a fine of HK$3,000,000 and to imprisonment
for six months, and on conviction on indictment, to a fine of HK$10,000,000 and to imprisonment for two years.
The
Commissioner for Labour may serve improvement notices on an employer or an occupier of the workplace against contravention of this ordinance
or the Factories and Industrial Undertakings Ordinance (Cap 59 of the Laws of Hong Kong), or suspension notices against an activity or
condition or use of workplace where there is an imminent risk of death or serious bodily injury. An employer or occupier who fails to
comply with such improvement notices without reasonable excuse commits an offence and is liable on conviction to a fine of HK$400,000
and imprisonment of up to twelve months. An employer or occupier who fails to comply with such suspension notices without reasonable
excuse commits an offence and is liable on conviction to a fine of HK$1,000,000, to imprisonment for twelve months, and to a further
fine of HK$100,000 for each day or part of a day during which such employer or occupier knowingly and intentionally continues the contravention.
Factories
and Industrial Undertakings Ordinance (Chapter 59 of the Laws of Hong Kong)
The
Factories and Industrial Undertaking Ordinance (the “FIUO”) imposes general duties on proprietors of and persons employed
at industrial undertakings, including without limitation to cargo and container handling undertakings, factories and other industrial
workplaces, to ensure health and safety at work in such undertakings. Proprietor includes any person, body corporate, a firm, an occupier
and the agent of such an occupier having the management or control of the business carried on in an industrial undertaking for the time
being.
Section
6A(1) of the FIUO provides that “it shall be the duty of every proprietor of an industrial undertaking to ensure, so far as is
reasonably practicable, the health and safety at work of all persons employed by him at the industrial undertaking.” Contravention
of such duty is an offence and is liable to a fine of HK$3,000,000 on summary conviction, and HK$10,000,000 on conviction on indictment.
A proprietor that willfully contravenes the duty imposed by section 6A(1) without a reasonable excuse commits an
offence and, upon summary conviction, is liable for a fine of HK$3,000,000 and imprisonment for six months upon
summary conviction and, upon conviction on indictment, for a fine of HK$10,000,000 and imprisonment for two years.
There
are 30 sets of subsidiary regulations under the FIUO, covering various aspects of hazardous work activities in various workplaces, containing
detailed health and safety standards on work situations, plant and machinery, processes and substances.
Factories
and Industrial Undertakings (Lifting Appliances and Lifting Gear) Regulations (Chapter 59J of the Laws of Hong Kong)
The
Factories and Industrial Undertakings (Lifting Appliances and Lifting Gear) Regulations lay down the legal requirements for safe use,
construction, testing and examination of lifting gear and lifting appliance used for lowering or raising or as a means of suspension
in any industrial undertaking (the “Lifting Equipment”). Every employer providing lifting equipment for use at work, and
every person having control of such use, should observe and ensure compliance with the regulation. In particular, the lifting equipment
must be sufficiently strong, properly maintained, and thoroughly examined by a competent examiner at least once every twelve months and
certified by the competence examiner in an approved form as being in a safe working order; the lifting equipment should not be loaded
beyond the maximum safe working load; and that no load is left suspended from a lifting appliance unless a competent person is in charge
of the lifting appliance during the period of suspension.
Depending
on the offence, different levels of penalty are imposed for contraventions of these regulations. The penalties for committing an offence
under the Factories and Industrial Undertakings (Lifting Appliances and Lifting Gear) Regulations range from a fine at HK$100,000 to
HK$400,000, and imprisonment of up to twelve months.
Factories
and Industrial Undertakings (Loadshifting Machinery) Regulations (Chapter 59AG of the Laws of Hong Kong)
These
regulations regulate the use and operation of loadshifting machinery. Loadshifting machinery used in industrial undertaking
as defined in the regulations includes fork-lift trucks.
Regulations
3 and 4 impose duties on the responsible person to (i) ensure that the loadshifting machine shall be operated by a person aged 18 or
above and holding a valid certificate applicable to the type of loadshifting machine that that person is instructed to operate, (ii)
provide every employee instructed to operate the loadshifting machine a training course conducted for the relevant type of loadshifting
machine, and (iii) if the employee fails to obtain a certificate following the training course, the employer is responsible to provide
an additional training course. The meaning of responsible person, in these regulations and the context of industrial undertaking, is
a person having the management or in charge of the machine, but excluding the person operating the machine.
A
responsible person without reasonable excuse contravenes the duty imposed by Regulation 3 or 4 is liable to a fine of HK$100,000.
Regulations
Related to Intellectual Property
Copyright
Ordinance (Chapter 528 of the Laws of Hong Kong)
The
Copyright Ordinance protects recognized categories of literary, dramatic, musical and artistic work, as well as sound recordings, films,
broadcasts and cable programs, and typographical arrangement of published editions. Certain acts such as copying and/or issuing or making
available copies to the public of a copyright work without the authorization from the copyright owner would constitute “primary
infringement” of copyright which does not require knowledge of infringement.
In
addition, a person may incur civil liability for “secondary infringement” under the Copyright Ordinance if that person possess,
sells, lets for hire, distributes or deals with a copy of a work which is, and which he knows or has reason to believe to be, an infringing
copy of the work for the purposes of or in the course of any trade or business without the consent of the copyright owner. However, the
person will only be liable if, at the time he committed the act, he knew or had reason to believe that he was dealing with infringing
copies.
Under
section 118 of the Copyright Ordinance, a person commits a criminal offence if he, without the consent of the copyright owner of a copyright
work, makes for sale or hire an infringing copy of the work or possess an infringing copy of the work with a view to its being, among
others, sold or let for hire by any person for the purpose of or in the course of that trade or business.
Under
section 119A of the Copyright Ordinance, there is a provision against copying service business which imposes criminal liability when
a person, for the purpose of or in the course of a copying service business, possess a reprographic copy of a copyright work as published
in a book, magazine or periodical, being a copy that is an infringing copy of the copyright work. It is a defense for the person charged
to prove that he did not know and had no reason to believe that the copy of a copyright work in question was an infringing copy of the
copyright law.
Trade
Marks Ordinance (Chapter 559 of the Laws of Hong Kong)
The
Trade Marks Ordinance provides for the registration, use and protection of trademarks. Under section 18 of the Trade Marks Ordinance,
it is provided that a person infringes a registered trademark if the person uses in the course of trade or business a sign which is:
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identical
to the trademark in relation to goods or services which are identical to those for which it is registered; |
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identical
to the trademark in relation to goods or services which are similar to those for which it is registered; and the use of the sign
in relation to those goods or services is likely to cause confusion on the part of the public; |
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(c)
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similar
to the trademark in relation to goods or services which are identical or similar to those for which it is registered; and the use
of the sign in relation to those goods or services is likely to cause confusion on the part of the public; or |
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(d) |
identical
or similar mark in relation to goods or services which are not identical or similar to those for which the trademark is registered;
the trademark is entitled to protection under the Paris Convention as a well-known trademark; and the use of the sign, being without
due cause, takes unfair advantage of, or is detrimental to, the distinctive character or repute of a trademark. |
A
person shall be treated as a party to any use of the material which infringes the registered trademark if he:
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(a)
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applies
or causes to be applied a registered trademark or a sign similar to a registered trademark to material which is intended to be used
for labelling or packaging goods; as a business paper; or for advertising goods or services; and |
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(b)
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at
the time the trademark or sign was applied to the material, he knew or had reason to believe that its application to the material
was not authorized by the owner of the registered trademark or by a licensee. |
Trademarks
registered in other countries or regions are not automatically entitled to protection in Hong Kong unless they are also registered under
the Trade Marks Ordinance. Nevertheless, trademarks which are not registered under the Trade Marks Ordinance may still obtain protection
by the common law action of passing off, which requires proof of the owner’s reputation in the unregistered trademark and that
use of the trademark by third parties will cause damages to the owner.
Regulations
Related to Import and Export of Goods
Import
and Export Ordinance (Chapter 60 of the Laws of Hong Kong)
The
Import and Export Ordinance provides for the regulation and control of the import of articles into Hong Kong, the export of articles
from Hong Kong, the handling and carriage of articles within Hong Kong which have been imported into Hong Kong or which may be export
from Hong Kong, and any matter incidental to or connected with the foregoing.
The
import and export of certain articles are prohibited unless with the relevant licenses under sections 6C and 6D which are issued under
section 3 of the Import and Export Ordinance. Pursuant to section 6C of the Import and Export Ordinance, no person shall import any article
specified in Schedule 1 to the Import and Export (General) Regulations (Cap 60A of the Laws of Hong Kong) except under and in accordance
with an import license issued by the Director-General of Trade and Industry under section 3 of the Import and Export Ordinance. Section
6D of the Import and Export Ordinance provides that no person shall export any article specified in the second column of Schedule 2 to
the Import and Export (General) Regulations to the place specified opposite thereto in the third column of the schedule except under
and in accordance with an export license issued by the Director-General of Trade and Industry under section 3 of the Import and Export
Ordinance.
Any
person who contravenes section 6C or 6D of the Import and Export Ordinance in respect of any article specified in Part 1 of Schedule
1 or Part 1 of Schedule 2 to the Import and Export (General) Regulations (Chapter 60A of the Laws of Hong Kong) shall be liable on conviction
to a fine of HK$500,000 and to imprisonment to two years. Any person who contravenes section 6C or 6D of the Import and Export Ordinance
in respect of any article specified in Part 2 of Schedule 1 or Part 2 of Schedule to the Import and Export (General) Regulations (Chapter
60A of the Laws of Hong Kong) shall be liable to a fine of $500,000 and to imprisonment for two years on summary conviction, or a fine
of $2,000,000 and to imprisonment for seven years on conviction on indictment.
Import
and Export (Registration) Regulations (Chapter 60E of the Laws of Hong Kong)
Regulation
3 of the Import and Export (Registration) Regulations (“Import and Export Regulations”) sets out exemptions in respect of
regulations 4 and 5.
Pursuant
to regulation 4 of the Import and Export Regulations, every person, including company, who imports any article other than an exempted
article shall lodge with the Commissioner of Customs and Excise an accurate and complete import declaration relating to such article
using services provided by a specified body, in accordance with the requirements that the Commissioner of Customs and Excise may specify.
Every declaration required to be lodged shall be lodged within 14 days after the importation of the article to which it relates.
Regulation
5 of the Import and Export Regulations requires that every person who exports or re-exports any article other than an exempted article
shall lodge with the Commissioner of Customs and Excise an accurate and complete export declaration relating to such article using services
provided by a specified body, in accordance with the requirements that the Commissioner of Customs and Excise may specify. Every declaration
required to be lodged shall be lodged within 14 days after the exportation of the article to which it relates.
Any
person who fails or neglects to do such declaration as required under regulations 4 and 5 of the Import and Export Regulations
within 14 days after the importation or exportation (as the case may be) of the article to which it relates without any reasonable excuse,
or, where he or she has such excuse, fails or neglects to lodge such declaration in such manner as soon as is practicable after the cessation
of such excuse, shall be liable to (1) a fine of HK$2,000 upon summary conviction; and (2) commencing from the date of conviction, a
fine of HK$100 in respect of everyday during which his failure or neglect to lodge such declaration in that manners continues. Further,
any person who knowingly or recklessly lodges any declaration with the Commissioner of Customs and Excise that is inaccurate in any material
particular shall be liable on summary conviction to a fine of HK$10,000. Any person who, in contravention to the provisions of regulations
4 and 5 of the Import and Export Regulations knowingly or recklessly lodges any declaration with the Commissioner of Customs and Excise
that is inaccurate in any material particular shall be liable on summary conviction to a fine of HK$10,000.
Regulations
and Notices Related to Hong Kong Taxation
Inland
Revenue Ordinance (Chapter 112 of the Laws of Hong Kong)
Under
the Inland Revenue Ordinance, where an employer commences to employ in Hong Kong an individual who is or is likely to be chargeable to
tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than three months
after the date of commencement of such employment. Where an employer ceases or is about to cease to employ in Hong Kong an individual
who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland
Revenue not later than one month before such individual ceases to be employed in Hong Kong.
Tax
on dividends
Under
the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong with respect to dividends paid
by the Company.
Capital
gains and profit tax
No
tax is imposed in Hong Kong with respect to capital gains from the sale of shares. However, trading gains from the sale of shares
by persons carrying on a trade, profession, or business in Hong Kong, where such gains are derived from or arise in Hong Kong, will be
subject to Hong Kong profits tax, which is imposed at the rates of 8.25% on assessable profits up to HKD2,000,000 and 16.5% on any part
of assessable profits over HKD2,000,000 on corporations from the year of assessment commencing on or after April 1, 2018. Certain categories
of taxpayers (for example, financial institutions, insurance companies, and securities dealers) are likely to be regarded as deriving
trading gains rather than capital gains unless these taxpayers can prove that the investment securities are held for long-term investment
purposes.
Stamp
Duty Ordinance (Chapter 117 of the Laws of Hong Kong)
Under
the Stamp Duty Ordinance, the Hong Kong stamp duty currently charged at the ad valorem rate of 0.13% on the higher of the consideration
for or the market value of the shares will be payable by the purchaser on every purchase and by the seller on every sale of Hong Kong
shares (in other words, a total of 0.26% is currently payable on a typical sale and purchase transaction of Hong Kong shares). In addition,
a fixed duty of HKD5 is currently payable on any instrument of transfer of Hong Kong shares. Where one of the parties is a resident outside
Hong Kong and does not pay the ad valorem duty due by it, the duty not paid will be assessed on the instrument of transfer (if any) and
will be payable by the transferee. If no stamp duty is paid on or before the due date, a penalty of up to ten times the duty payable
may be imposed.
Regulations
Related to Personal Data
Personal
Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong)
The
Personal Data (Privacy) Ordinance (“PDPO”) imposes a statutory duty on data users to comply with the requirements of the
six data protection principles (the “Data Protection Principles”) contained in Schedule 1 to the PDPO. The PDPO provides
that a data user shall not do an act, or engage in a practice, that contravenes a Data Protection Principle unless the act or practice,
as the case may be, is required or permitted under the PDPO. The six Data Protection Principles are:
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Principle
1 — purpose and manner of collection of personal data; |
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Principle
2 — accuracy and duration of retention of personal data; |
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Principle
3 — use of personal data; |
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Principle
4 — security of personal data; |
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Principle
5 — information to be generally available; and |
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Principle
6 — access to personal data. |
Non-compliance
with a Data Protection Principle may lead to a complaint to the Privacy Commissioner for Personal Data (the “Privacy Commissioner”).
The Privacy Commissioner may serve an enforcement notice to direct the data user to remedy the contravention and/or instigate prosecution
actions. A data user who contravenes an enforcement notice commits an offense that may lead to a fine and imprisonment.
The
PDPO also gives data subjects certain rights, inter alia:
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the
right to be informed by a data user whether the data user holds personal data of which the individual is the data subject; |
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